A basic budget outlines your expenditures and designates limits for each over a given period. This outline can help you determine whether you’re earning and spending within your abilities. With QuickBooks, you can easily glean insight into spending patterns and assess where your business stands financially. After identifying your variable expenses and estimating how much they cost each month, subtract the amount from your income. To find out how much money your business is bringing in, refer to your profit and loss statements.

Step 2: Set Up the Template

Examples include insurance, rent for office space, website hosting, and internet. Remember, fixed costs stay relatively stable, regardless of changes in business activity. Even if your sales business budget decrease or production slows down, these costs remain the same. A labor budget helps you plan and manage the costs related to your employees.

The budget also includes miscellaneous receivables collected in cash and other cash payments, such as payroll costs. Business owners should create cash roll-forwards last because they need a cash projection for each month. You’ll see that the beginning of January cash balance ($10,000) is the year-end cash balance in the prior year’s balance sheet. The budgeted balance sheet includes assumptions that address each of the line items in the report.

How to use the Excel business budget template

As a business owner, you’re likely familiar with unexpected expenses. Businesses with diverse operations or that rely on project-based income often use activity-based budgeting. This method links your budget to specific activities or projects, allowing you to track costs and allocate resources more effectively.

Once you’re ready to get your business idea off the ground, you’ll need to consider startup costs. If you wondering if you can or should purchase new equipment this year, even if you can get it at a discount rate, make sure you refer to your business budget plan. While fixed costs are easy to predict, variable costs can fluctuate wildly.

• HighRadius offers a cloud-based Treasury and Risk Suite that streamlines and automates treasury operations, including cash forecasting, cash management, and treasury payments.
• Your business budget can present a view of your financial health, including where you’re spending money and where you might benefit from cutting back.
• This gives you a snapshot of your budget that’s easy to find without diving into layers of crowded spreadsheets.
• You can’t predict when you’ll need to pay for an emergency expense or how much it might cost, but you can set aside a cash reserve to lessen the burden.

This detailed breakdown helps track spending at each phase and ensures you have enough buffer for unexpected changes. By creating a project budget, you can make sure the project is doable from a financial standpoint. It tracks how much you planned to spend versus how much you actually spend as you go along. To create a labor budget, consider how much work needs to be done, how many folks you’ll need to get it done, and how much it’ll all cost.

• Building flexibility into your budget isn’t a sign of uncertainty—it’s a sign of preparation.
• The budget also looks at different ways to finance these investments, whether through loans, leases, or other options.
• You can track your business expenses effortlessly and accurately using QuickBooks.
• The only way to navigate such challenges is to create a dynamic budget that not only maximizes revenues but also fortifies businesses from sudden downturns.
• The family budget template is tailored to help households manage their shared finances effectively.

Then right after getting a life-changing contract, your main printer breaks down before you even start. We have financial relationships with some companies we cover, earning commissions when readers purchase from our partners or share information about their needs. Our editorial team independently evaluates and recommends products and services based on their research and expertise.

Tools like QuickBooks can help you streamline your budgeting efforts. QuickBooks provides customizable financial tools that allow you to monitor your cash flow in real time, categorize expenses, and make adjustments to your budget on the fly. One of the most common mistakes small business owners make is overlooking certain expenses, especially small or irregular ones. Over time, these unaccounted-for costs can add up and throw off your entire budget. Make sure to track every single expense, no matter how minor it may seem, from office supplies to web hosting fees. Including these in your budget ensures that you won’t be caught off guard by large expenses.

But, the SMART goals framework can provide a tried-and-true method for determining any operation’s budget goals. We believe everyone should be able to make financial decisions with confidence. Widget Inc. assumes that cash received for sales and the cash paid for inventory will be evenly distributed over 12 months. In reality, the payments will be uneven, but the cash inflows and outflows can be difficult to predict by month. Use your bookkeeping records to determine what might transpire over the next month, quarter, or year. But ultimately, it’s a better idea to be conservative with your budget than to expect the best-case scenario.

And when your profits are on the uptrend, you can allocate more money to variable expenses to help you grow faster. Budgeting can be intimidating, but don’t worry—you don’t need a financial or accounting background to create a small business budget. In this post, I’m going to cover all of the budgeting basics you need to know, show you how to create a small business budget, and then provide templates so you’re not starting from scratch.

Lenders and investors will want to see that you have a solid financial plan in place and that you can responsibly manage your company’s finances. Look for variances in revenue, expenses, or cash flow, and investigate why those differences occurred. Some adjustments may be minor, like reallocating funds between departments. Others may require rethinking parts of your budget if performance falls short or priorities shift.