Take back control of your money by not just budgeting but monitoring & controlling it too!
To make it happen you just need to schedule the time but it is really easy – we’ll tell you how…
Well done if you have already set a budget, that is a great achievement but don’t let it be like a New Year’s resolution… set in January & forgotten about by February. If you haven’t – read How to Budget.
Budgets need to be monitored at least monthly against what you actually spent in the month. This way you can see where you are over spending & can curb this or alter the budget before you get to the end of the year & are needing loans but are not sure why or where the money is going.
A budget variance is the difference between the budgeted expense or revenue, and the actual amount spent. The budget variance is favourable (underspend) when the actual revenue is higher than the budget or unfavourable (overspend) when the actual expense is less than the budget.
The more detail you have in your budget the more control you will have & ability to see where the money is actually going for example (as illustrated on the the left) your Entertainment Budget is 2,839 a month & you have spent 6,298 was that over spend in a department, for a staff function or client function or by just one person? If you split up entertainment per division or even inhouse vs client spend you would know exactly where the overspend was happening & better be able to do something about it.
What do we do with variances?
- Investigate the reason for them
- Determine if they show a need to change to your budgeting assumption or you need tighter spending controls around this expense
Contact us & learn exactly how to Budget in an LDP Workshop, or let us come & work out a budget for your business.