BUSINESS PLANS, BUDGETING AND MANAGEMENT ACCOUNTS

Many businesses ignore the importance of good financial planning, assuming that what they believe is a good business idea will naturally provide them with profit and growth.  This can be a sure fire way to ensure business failure rather than business success!

Business Plans

All businesses should have a written strategic plan which

• Describes the business

• Lists the objectives and strategies for achieving these

• Provides financial forecasts for the short, medium and long term

A business plan is used for many purposes:

• It can provide information potential investors

• It can be used to securing external funding and loans

• It will ensure you keep your business on track

• It can be used to measure how successful (or otherwise) your business is

Budgets

In its simplest form, a budget is predicting on paper, as best you can, what your financial transactions are likely to be during the coming year.  More specifically, it can be described as the conversion of the plans of a business into a financial statement.    It is important that this process goes on as part of your strategic planning activity as the financial implications of a plan are crucial to its success or failure.

Management Accounts

Whilst the budget is a forecast of what you believe (and hope) will happen financially during the coming year, the reality may be different and therefore regular comparisons of the two should be made and analysed.  The process of Management Accounting should be undertaken regularly throughout the year - at least every quarter, possibly monthly.

We can assist you in this often overlooked area by

• Preparing a budget for the coming 12 months

• Comparing this with your actual financial information regularly throughout the year and providing you with written reports on your financial performance

• Highlight areas of concern and help you plan to overcome these