Online Class: Business Budgeting 101 — How to Plan, Save, and Manage
These topics will be discussed:
Business Budget: We will discuss the different aspects of a business budget and how to implement a discipline for your budget that will be reasonable for your staff.
Cash Flow & Related Issues: We will cover the basics of cash flow, short-term cash flow, long-term cash flow, how they affect your P&L statement and profit sheets.
Business Savings and Cost Cutting: We will discuss the various areas of savings and cost cutting to explore in your company. We will also discuss employee involvement and motivation and non-traditional areas to examine.
Payroll Budgeting: We will cover the basics of payroll budgeting, essentials to keep in mind, and both the trend in handling them and some non-traditional methods.
Tax Concerns: We will discuss effective strategies for managing taxes is to establish a budget for your company's taxes.
Business Plan: We will cover the importance of creating a business plan, how to create one and how to make it a strong presentation.
Business P&L Reports: We will take an overview of your Profit & Loss Reports, what goes where, how to read them and the essentials for a successful business manager to know.
Profit Margin Guarantees & Staying in the Black: We will cover basic and popular theories and practices in the business world.
Balance Sheets and the Business Cycle: We will cover the importance and uses of the company's Balance Sheet and we will briefly visit the concepts of the Business Cycle.
Traps and Mishaps: We will address the dilemma of overcoming our inevitable errors in business and managementCompany Savings.
We will focus on savings and how to make the most progress toward savings by utilizing the good will and brain power of your staff. You will have an overview of how to continue to increase your company's savings and how to encourage sales and staff members with rewards without giving away the savings.
To begin a business or start managing an established business, a budget must be created for the manager in charge of the company or department. In many ways, a business budget is similar to a personal household budget; in other ways, it is not.
If you are entering into a position as a department manager in a large corporation, there may be corporate politics connected to your new management position that will inevitably affect your departmental budget.
In the corporate world, such things will appear and may become issues in your business budget. Common sense, good public relations, and excellent salesmanship will help you the most when dealing with the politics of such situations. If you are not in the corporate world, and this is for your own business, then you have the personal advantage of being more brutally honest with yourself concerning your business budget. Brutal honesty always benefits the business owner in the long run.How to Create a Budget
Creating a basic business budget is the first step in effective management, whether you manage a small business or a department inside a large corporation. Without a budget, there is no sense of company controls, goals, or financial direction.
For your company, you want to identify:
1. fixed expenses/overhead;
2. sales expenses;
3. variable and miscellaneous expenses.
You also will want to identify:
1. projected sales;
2. consulting revenue;
3. revenue from services offered;
4. miscellaneous sources of revenue.
You then will lay these items out in a monthly, quarterly, or annual format, and preferably in a table or spreadsheet program such as Excel. It is wise to format them in all three time increments so that you can closely track your adherence to your budget.
What to Include and Exclude
Include the following items in your budget:
· Rent or mortgage payment
· Utilities such as phone, Internet, and electric
· Staff salaries
· Staff benefits expenses, including retirement, health care, etc.
· Contractor's fees (workers with 1099 tax forms)
· General advertising costs
· Printing and postage costs
· Equipment costs
· Car or truck payments for company vehicles
· Insurance costs
· Professional fees, such as legal or accounting services
· Tax responsibilities
· Commissions due to salesmen
· Materials cost
· Production costs
· Subcontractors' fees
· Direct sales advertising costs; i.e., direct mail marketing, flyers, etc.
Variable and Miscellaneous Expenses:
· Overtime pay
· Raw materials
· Unpredicted and unanticipated necessary costs
You will want to exclude anything that reasonably could fall into the personal expenses category of any individual of the company. Examples include loan payments and insurance for any vehicle that is not designated as a company vehicle, groceries or personal grooming for members of the company, personal dry cleaning expenses, maid services, baby-sitting services, and any other personal services for individuals in the company.
This is always true with one caveat: If any of these expenses is part of a staff contract with an executive employee, then it can be included under the fixed expenses category of "staff benefits expenses."Business Budget Visuals
A budget without discipline is not a budget. In the same way that an unreconciled checkbook checks nothing at all, so too a budget that is not adhered to with discipline is nothing more than a nice-looking collection of papers. Discipline with your budget is a matter of diligence, dedication, and determination. A successful manager sets into place tools to help him or her regularly check on the diligence with which the budget is being adhered to by all. A regular check system is vital to discipline. The more regularly you check your system, the tighter the ship you will run and the more successful you will be with the goals and directives of your planned budget.
When all parties are accountable and required to report daily, weekly, monthly, quarterly and annually, then the manager need only read the statistics to determine whether the crew is on course. A budget that is managed by a daily report system, a weekly reconciling, and a monthly management scrutiny is the most likely to succeed in its goals of keeping the company within its spending parameters.
In many ways, discipline with your company's budget is like getting to work on time, balancing your checkbook, or rotating the tires on your car: If you do not do it regularly and religiously, then you will not have the results you want. Think of checking on your budget or reconciling budget issues as you would think of having your afternoon coffee. It is necessary so you do not fall asleep just before wrapping up the profits.
The best asset any company can have for discipline in its budget is a proactive, diligent staff accountant or Certified Public Accountant; one who will ask questions of management daily, repeatedly, and without ceasing until issues that she or he raises are resolved. All company employees should understand that they must answer the accountant's questions when asked.
Lesson 1: Business BudgetThis lesson will cover the basics of creating your business budget. We will discuss the different aspects of a business budget and how to implement a discipline for your budget that will be reasonable for your staff.
Lesson 2: Cash Flow and Related IssuesIn this lesson, we will cover the basics of cash flow, short-term and long-term, and how it affects your profit and loss statement and profit sheets.
Lesson 3: Business Savings and Cost-cuttingLesson 3: Business Savings and Cost-cutting
Lesson 4: Payroll BudgetingIn this lesson, we will cover the basics of payroll budgeting, essentials to keep in mind, and both the trend in handling them and some non-traditional methods.
Lesson 5: Tax ConcernsTax Concerns: One of the most effective strategies for managing taxes is to establish a budget for your company's tax obligations.
Lesson 6: Business PlanIn this lesson, we will cover the importance of creating a business plan, how to create one, and how to make it a strong presentation.
Lesson 7: Business Profit and Loss ReportsIn this lesson, we will take an overview of your profit and loss reports, what goes where, how to read them, and the essentials for a successful business manager to know.
Lesson 8: Profit Margin Guarantees and Staying in the BlackWhile we could hypothesize together about the many ways to create a profit in any given business, this lesson will cover basic and popular theories and practices in the business world.
Lesson 9: Balance Sheets and the Business CycleIn this lesson, we will cover the importance and uses of the company's balance sheet and briefly visit the concepts of the business cycle.
Lesson 10: Traps and MishapsThis lesson will address the dilemma of overcoming our inevitable errors in business and management.
Lesson 11: Company SavingsThis lesson will focus on savings and how to make the most progress toward savings by utilizing the goodwill and brain power of your staff. You will have an overview of how to continue to increase your company's savings and how to encourage sales and sta
- Summarize the need and purpose of a business budget.
- Define cash flow.
- Describe procedures involved in business savings and cost cutting.
- Describe the purpose and processes involved in payroll budgeting.
- Summarize common tax concerns.
- Describe a business plan.
- Describe the purpose and importance business P&L Reports.
- Define Profit Margin Guarantees
- Evaluate Balance Sheets and the Business Cycle.
- Demonstrate mastery of lesson content at levels of 70% or higher.
Additional Course Information
- Document Your Lifelong Learning Achievements
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- "I loved this class. I learnt a lot." -- Sarah K.
- "What was most helpful were the definitions, descriptions, and anecdotes." -- Michael A.
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