A company must set a budget for financial income and expenditure. This is commonly referred to as budget management .
What is Budget Management?
Budget or budget is an important planning and forecasting process to help companies in the financial sector. This is done by balancing expenses with income. If it is out of balance or more expenditure than is produced, then of course it will cause problems for the company.
Management is the administration of a company or business, a non-profit corporation and also a government entity. Management includes organizing corporate strategy activities and coordinating the efforts of employees to achieve company goals such as finance, technology and human resources. Management also refers to the word “manage”
That way, the relationship between budget and management is the analysis, organization and supervision as well as expenditure and income in the business or company. With good management, it allows the smooth running of the company and the company’s growth in the future. Many companies don’t realize that they are slowly sinking into a sea of debt. Therefore, this budget will make the company prioritize spending and focus on things that are really needed.
Choosing a Budget System
There are three ways to create, track and monitor a budget. Each system uses different budget techniques , but all are centered on one thing and equally show every detail of budget management.
· Notebook and Pen
This is the oldest method for budget management. With this method, you write down all sources of income and all expenses of your company. Usually, you write in a special notebook that is made a line extending downward in making a budget using this system. If it’s balanced, you can already use the budget.
The most popular software for budget management is Microsoft Excel. Many websites offer free samples of Excel spreadsheets that can be used. Compared to using a notebook, this is far more practical even though you have to learn all the formulas so that the process becomes faster.
· Accounting Software
There are several web-based accounting software that can help you manage your budget. Software programs such as Journals allow you to create and classify your expenses into categories that you create and track your income and expenses. So you can see where the company’s money goes out after the transaction is completed.
How to Make Budget Management
The budget shows how much money went into your company and how it is used. This is one of the most important tools for building a successful financial future because it helps companies get maximum results.
· Set a Goal
There are two types of financial goals: short term and long term. The short term focuses on using your company’s finances in one day while the long term relates to your income and expenses for some time. Both are equally important and complementary. You can focus on the goals that meet the company’s needs and prioritize them.
· Calculate Company Income and Expenditures
After knowing the financial goals, you need a plan to achieve them. To do this, you need to evaluate your income and expenses . Start by making a list of sources of company expenses, payment of salaries, bonuses and employee benefits. If you don’t know the original amount, you can use the estimate. Then after that just calculate the total revenue that your company will get.
· Analyze Your Expenses and Balance
The purpose of budget management is to ensure that your expenses do not exceed income. If indeed spending more, then you have to make adjustments. If you do it online, accounting software such as Journals can immediately show this step to make it easy. Make sure you don’t miss anything.
Once again, if you are used to using a computer or even a smartphone, accounting software will automate the management of the company’s budget, this certainly saves you time and frustration and can be accessed anywhere and anytime.
After you resolve all the clutter in budget management, you must commit to follow it. This is an effort to lead a financially healthy future for you and your company. But you have to stay realistic and evaluate often, don’t be afraid to adjust. Budgeting is about balance.