I remember one Christmas my husband wrote a project plan for Christmas Dinner. Me, my parents and my husband’s parents all laughed at this – a project plan for Christmas Dinner! How ridiculous! However despite our ridicule he persisted and it worked. We ate on time with everything cooked and ready. The next year my mother in law got him the following sign.
This now sits on the windowsill in my office and is a really good reminder of why I need to plan. So this got me thinking about why businesses need to plan and in particular financially plan.
You know what it’s like. You’re so busy with the day to day issues that are required to run your business you never have the time to sit back a plan.
Yes it might seem boring. And it might seem like it won’t have any benefit but that’s where you are wrong. If you don’t set a plan how will you know where you are going?
When talking financial plan I mean a budget with a regular cycle of forecasting and ongoing monitoring. “But I don’t have time for that. I have a hundred and one other things to do” I hear you say and you know what I agree. You probably don’t have the time but I do! This is where real value can be added to your organisation. Giving you the time to focus on the day to day operations.
A budget will include an estimate of income and expenditure for a set period of time (usually a year). Based in this you will be able to see if you’re going to make a profit or loss for the period. It can also include things such as sales volumes.
As well as setting out a financial plan for the year it also helps as a plan of action towards a defined objective and enables you measure your organisations performance on a regular basis taking proactive action.
So whilst yes setting a financial plan for the year may seem boring and time consuming it is a vital tool in helping you manage your organisation.
If you’re struggling with your organisations financial planning and want some help then give me a call!
If you’re looking for more than an accountant then why not give Emma an email or a call?
07419 786 943