If you’re preparing to start up a new enterprise, an endless number of concerns probably seem to be competing for your constant attention. Many of these center around the company’s finances, especially the cost-to-profit ratio. Of course there are the critical financial issues, such as acquiring sufficient start up capital, deciding employee salaries and keeping accurate records for tax preparation.
But if you really want your business to have a good cost-to-profit ratio from the get-go, you also need to consider the smaller, day-to-day financial expenditures that are necessary for company operations. Keeping an eye on the bottom line by successfully managing small, everyday expenses can help you maintain a financially successful work environment.
So how do you find a way to hit that professional financial sweet spot? Here are five crucial ways to make sure that your company’s day-to-day budget stays on track.
- Outline a realistic budget: Have a good idea of how much you’ll have at your disposal to use for your weekly and monthly expenditures. Don’t forget about required things like your business licensing fee, surety bond cost and insurance premiums, which can sneak up on you and break your budget if you don’t remember to set aside funds for them. Build in some emergency funds to allow for some wiggle room just in case.
- Maintain accurate records: Make sure that you have a system in place to keep an accurate record of all expenditures. Without a consistently organized record, the likelihood for budgetary errors increases, and you’ll never know for sure where exactly all of the money has gone. Don’t be afraid to adjust your budget as needed; just be sure you’re always keeping a realistic view of how your current budgetary decisions will affect your future finances.
- Keep on top of your your budgetary schedule: Make sure that you continuously reconcile what you have left in your weekly and monthly budgets with what you’ve already spent to ensure that you are still on track. Try to spend the minimum every month while still being flexible. Finding out that you need to make adjustments early on can save you money in the long run.
- Manage team purchases: If you decide to authorize some of your employees to make company purchases, meet with them to make sure that they understand the basic needs of the office, as well as limitations for spending. Set a cap, but make sure they feel comfortable coming to you with any questions.
- Sustain a true understanding of your workplace’s budgetary needs: This is by far the most important tip to keeping on top of your company budgets. The goals for your budgets and daily expenditures should coincide. If so, it will be easier to differentiate among the need for expensive purchases, where you can cut corners and when you can go without—all without compromising the quality of your work.
This post was written by SuretyBonds.com as a part of the agency’s Surety Bond Education Program. SuretyBonds.com is a nationwide surety bond producer that issues bonds to a wide array of professionals. The agency is committed to helping professionals manage their finances in a realistic manner.