Financial Mistakes Your Business Needs To Put Right In 2019

Business owners need to get their budgets right to succeed.

 

Nevertheless, this is something that most leaders tend to get wrong. The vast majority of projects tend to go over budget, and this can really hurt a company’s profitability. It is, therefore, of little surprise that this is often an area of focus for most companies in 2019.

 

With that in mind, read on to discover some of the mistakes your business needs to make an effort to put right in time for the new year…

Stop Holding Your Cards

 

First and foremost, it is always beneficial to be transparent with your team regarding your evolving budget forecast. By keeping your team in the know, they will be more inclined to make sure they stick within the budget, and they will be aware of what is expected of them in order to do so.

 

Once they learn of the budget, you’ll notice that more workers are careful regarding how they designate hours and anything else that impacts the projects’ cost.

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Create Competition

It is likely you are going to have to make a number of significant purchases throughout the coming year. Why not reassess the way you purchase such items? An auction presents a great opportunity for you to purchase something at a fraction of the cost. You will be surprised by just how much you can save.

What About Resources?

 

You want to make sure that everyone working on the project is focusing on the correct tasks and carrying them out to optimal potential. One of the biggest components of the budget are salaries, and so you need to review resources on a weekly basis to ensure that everyone is putting in the correct amount of hours every week into their tasks, and that they are working on the highest priorities.

 

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Willing to Change?

 

No matter how well you prepare the initial budget, the chances are that it will change at some point.

 

You need to remember that the estimates you put together in the beginning are merely that – estimates. The very nature of doing businesses and the unexpected surprises that come with it, as well as the regular occurrences of scope creep, mean that the budget can quite easily change. If you are not prepared for this, you could find yourself in a very sticky situation.

Know Your Core

When budgeting, it’s always wise to start with the core costs.

By this we mean things that are a necessity to get your projects up and running, for example, software, equipment, team members, and travel. Once you have done this, you should compare the figures to the overall budget.

If these expenses do not fit under the complete cost figure, you need to talk with your stakeholders and/or your boss to determine how the project should be scaled in order to ensure it is completed within the available budget.

 

This post is for educational purposes only.

 

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl