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Budgeting Made Simple: A Practical Guide
This is how your business can stay ahead of rising costs:
Council tax has risen by 4.99%, annual energy bills have increased by an average of £111, and water bills have climbed by £10 per month. If this wasn’t enough, stress levels are being driven to the ground by higher National Insurance contributions, inflation-driven supplier costs, and general economic uncertainty.
Sounds scary, right? But it doesn’t have to be.
These changes may seem daunting, but instead we can view them as an opportunity: to tighten your budgeting, protect profitability and uncover new areas for efficiency. So, let’s regain control and explore practical ways to strengthen your financial position in the face of rising costs.
First things first, have an achievable plan in place
The foundation of any solid budget starts with understanding your finances. Here are three important factors to consider:
Using technology and cloud-based solutions to help make the above feel seamless
Let’s be honest, budgeting can often feel overwhelming and it’s tricky to know where to start, however living in today’s digital world is a privilege and this is where we can take advantage of that. Here’s how, with the right technology, we can make budgeting feel a lot less painful:
Invest in smart devices
Smart technology is a brilliant way to make your workplace more cost efficient (and sustainable!). While it might be tempting to opt for cheaper options, investing smart now can lead to significant savings later. Take smart thermostats for example, brands like Hive, Ecoebe and Nest don’t just offer convenience, they can cut heating bills by an estimated 12% (compared to a standard room thermostat with a gas boiler). If money is tight, you can consider starting with just one for your main office space.
Apps
Most smart devices come with companion apps – like the hive app, which lets you control your heating on the go, and this in turn gives you more control over your energy use.
In the same way, apps are transforming how businesses manage their finances. From budgeting to expense tracking, there is an app for just about anything nowadays. Whether you’re managing a shop, office, or warehouse, tools like QuickBooks and Xero can help you track spending, manage cash flow and keep team budgets on track.
Xero is a platform designed to help you manage your finances in real-time. You can track your cash flow and spending as it happens, so you won’t be left crossing your fingers until the end of the month.
Important to note: your reports will only be as accurate as the data you enter, so make sure your input is consistent and correct. Click the button below for further help or training on this!
Alongside Xero, platforms like SafeHR offer even more functionality, especially when it comes to managing bigger teams, holiday, and HR support such as employment contracts and managing annual leave applications.
Our accountancy top tip: consider linking your online banking directly to your bookkeeping tool. This way, transactions feed in automatically, saving time and helping to reduce errors. With everything connected in real-time, you can easily generate reports on your monthly profit and loss, track spending, and spot any issues early.
When we say ‘non-essentials’, we mean it
You know those purchases that leave you questioning “do I really need this?” or “is this really THAT important?” – it’s something we’ve all experienced. We are not telling you to eliminate everything that brings you joy or adds value to your business but rather refine your spending. Start by evaluating what’s truly necessary and identifying areas where adjustments can be made. Here are a few areas to consider (but not limited to) that could lead to substantial savings, that 1. we often overlook or 2. we are too stubborn to change:
Why you should be considering savings in your budget plan:
Let’s be honest, building savings into your budget is never going to be a bad idea, in fact, it might just be the best decision you make for your business. Not only will it bring peace of mind in today’s unpredictable landscape, but you’ll always have that safety net to lean on, allowing you to manage periods of tight cashflow and unexpected costs, or even to unlock growth opportunities when they arise, without panicking over where the money will come from.
Our accountancy top tip: split your income into 50% for operations, 30% for growth, and 20% for savings. You can open a separate business savings account and automatically transfer that 20% to create a safety net over time.
The cost of doing business can be tough, but budgeting is a powerful tool that leads the path to financial freedom. If you’re looking to expand your investment portfolio, we would be pleased to connect you with a qualified Independent Financial Advisor (IFA) to help you move forward.
We’re proud to partner with both Xero and SafeHR here at MJB Avanti. If you’d like more information about how these tools can support your business,
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