2015 Budget Tips
So many businesses either shut down or become very quiet over the festive season. You might however be stuck in the office until Christmas Eve, due to leave restrictions or business obligations and commitments. Why not use this quiet time in the office to plan your business or personal budget for 2015? Besides, it’s difficult to enjoy the holidays or your time off when you’re worried about money! Consider the following 2015 Budgeting Tips set out by PATC (Professional Accountants and Tax Consultants)…
1. The first step is to prepare for your financial year end before looking at your 2015 budget. See our blog: https://www.patc.co.za/preparing-for-the-financial-year-end/ for advice and steps on this subject.
2. Tax is unfortunately something that has to be considered when budgeting for the year ahead, we all need to pay tax and know what we owe before we spend what we don’t have. So step two involves asking yourself…what is my tax liability for the 2015 tax season? An accountant at PATC (Professional Accountants and Tax Consultants) will be able to assist you with your taxes throughout the year. Our accountants can make suggestions on how to reduce your tax liability by making contributions to a retirement plan, health savings account or any other possible recommendations.
3. Step three is all about thinking ahead and setting goals so that you and your business have a successful year. When you know how much money you have to spend or how much money is going to come in, it is time to start setting budgets for every avenue of your life or business.
Whether it is your business and certain amounts need to be allocated to salaries, marketing and production or your personal budget where things like rent, school fees, petrol and medical aid need to be considered, amounts need to be set in order to plan correctly for the year ahead. If it is your business budget you are creating, it is important to consider possible growth in the company, whether its sales or staff. It is very possible that a mid-year adjustment will need to be made to ensure efficiency and accuracy.
4. Consider your businesses revenue and profit growth. Are you going to add any one time or recurring expense as a result of your budgeting strategy? Make sure you’re being realistic with your goals and estimates! Also, compare your assumptions or goals with industry forecasts and benchmarks.
5. Budgeting can be tricky and may require you to get creative from time to time. Compare your actual results from 2014 against your monthly budget. If there are significant variations in categories, it’s time to figure out why. This will help to make your 2015 budget more effective and profitable!
6. When planning your 2015 budget, its best to start from the bottom and work your way up. Ask yourself – How much profit do I want to make? Add your expenses on top of that to work out your revenue number. Is the revenue number reasonable given the considerations spoken about in #4?
If you’d like help planning for your personal or company budget or require any help with your taxes or accounting, please contact us.