Budgeting and Forecasting Basics

Business.com / Accounting / Last Modified: February 22, 2017

Learn budgeting and forecasting basics to improve all aspects of your business. The quality and accuracy of the budget and forecast ...

Learn budgeting and forecasting basics to improve all aspects of your business. The quality and accuracy of the budget and forecast have a direct impact on cash flow, profitability, job costing and expansion plans for your firm. Time invested to learn these valuable skills is time well spent.

Write down the budget for the month, quarter and year. Review the details with your financial staff or accounting services firm. Discuss the logic behind the values provided to validate the accuracy of these numbers. Follow the three steps below to expand your understanding of budgeting and forecasting.

1. Investigate business budgeting software requirements.

2. Read about forecasting and budgeting.

3. Identify business budgeting software suppliers.

Learn about business budgeting software options

Business budgeting software is a great tool to enhance the quality and accuracy of your forecasting budgets. To determine your needs, make a list of the number of budgeting and forecasting categories, and subcategories and number of transactions per year. Discuss your forecasting and budgeting requirements with your accounting services firm and explore future needs and requirements.

Study budgeting and forecasting

Learn the key concepts in budget forecasting by reading business books. Avoid academic textbooks, as they tend to focus more on the theory than practical applications. Identify books and articles targeted to the business owner's perspective for the best results.

Meet with business budgeting software suppliers

Review business budgeting software suppliers available to meet your needs. Used together with your existing accounting software, these tools help to keep a company on budget by issuing easy to use reports and information to the key decision makers.
  • Schedule monthly meetings to review your budgeting and planning reports. Make a list of off budget items to follow up with the area managers. This process will improve the accuracy and cost effectiveness of your operation.

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