You have just started operations as a smalltime retailer selling products, mostly online. You know your trade – discounts and free shipping is the way to go to attract more customers.
You are doing well enough when it comes to the revenue but is this going to be enough?
Operating a business without any kind of finance tracking will just drag you down, perhaps not today or tomorrow but someday!
Don’t know the components of successful bookkeeping specifically when it comes to budgeting?
You are not alone. Fortunately, it’s not that difficult to grasp. In fact it’s not entirely difficult to plan and execute a top-notch budget for your business.
The first order of finance tracking is identifying your monthly expenses. Knowing the exact amount is important as this will help you create an accurate budget plan. Take a look at your bank statements, receipts and financial files as a starter.
Also factor in regular monthly payments, like insurance premiums. Get the most accurate financial picture by calculating an average for six months to a year.
How to find your correct average monthly expenses? Add up every expense made for the last six to twelve months; divide the amount by the number of months.
Adding up all expenses thoroughly and accurately will help you create a realistic budget. Many overlook this simple rule, forgetting to add unexpected bills in the complete spending estimates.
Figure Gross Profit Margin
This step in accurate finance tracking is easier to perform if you have been in business for a long time. Calculate exact cost of all goods sold and subtract the number from your overall sales revenue.
What are some factors to consider when estimating cost of sold goods?
- Beginning inventory
- Purchased or manufactured goods
- Shipping charges
Facing trouble with finding exact estimates of goods sold and manufactured? Own a startup and already have your hands full? Whatever the reason, hiring professional bookkeeping services, to take care of budgeting and recordkeeping is a viable solution.
Double Check and Readjust Figures
You will need to go back to the beginning and check all estimations for sales and expenses given the complex nature of accounting and bookkeeping.
Conducting readjustments of estimates might help you reach set profits or money saving targets. Although you must also make adjustments within the operation as per figures received.
This means purchasing fewer new supplies in the coming year or addition of two new employees. It depends how you make these adjustments. Add in these costs and/or savings and run the numbers again.
Taking professional accounting help is recommended when making a budget for the first time. Hiring a business consultant is also a good idea. Discuss all options available to a small business such as yours in Boca Raton by A&B Accounting & Business Solutions.