12 Budgeting and Forecasting Tips for every company
MXI is leading provider of software and services that enable business in the UK & Ireland, to achieve continuous business process improvements. MXI is committed to delivering ongoing customer value; a philosophy that extends throughout our entire company. From product development and support to professional services and account management, MXI continues to refine our customers’ expectations of what a software company can do for them. We have gathered some budgeting and forecasting tips that every company should be using.
1: Look at your budget or forecast and make sure it makes sense.
2: Remember that the revenues and expenses in your budget or forecast need to match.
3: Preparing a good budget or forecast is a matter of being systematic, careful, logical, and thorough. For example, work on one expense type at a time or one type of revenue across all accounts.
4: For a budget or forecast that to stay useful document any assumptions, methodology, and special entries carefully and thoroughly.
5: Never forget to check the bottom-line for each entity (e.g. department, group of accounts, account...) in your budget or forecast.
6: Compare the budget or forecast to actual data (e.g. last year) or to the current year budget to ensure consistency.
7: The goal of any budget or forecast is the bottom line so ss you make changes, keep an eye on the bottom-line.
8: Budget or forecast at the appropriate level of detail. A good rule of thumb is to budget or forecast at the level that you want to be able to monitor actual revenues and expenditures vs. the budget.
9: Always print a summary of your budget or forecast and ask yourself, "What will people who do not know all the details think when they look at this; will it look right to them?"
10: Trust your judgment: If something does not look quite right to you in your budget or forecast, then it almost certainly is not and chance are will not look right to anyone else.
11: Never forget to monitor your actuals against the budget or forecast on a regular basis. This makes it much easier to forecast the year-end balance and budget the following years.
12: Check it one more time!