Budgeting works by monitoring each type of expense incurred by the business – and it can benefit sole-traders as much as anyone else.
Budgeting will show how much you are spending on fuel, food, having your car serviced, wages, any type of expense. By reviewing how much you are spending in each area you can make intelligent decisions regarding whether the amount you are spending makes sense. We can also advise possible savings – for example if you are spending a lot on fuel, consider purchasing a more fuel-efficient car.
When you have effective budgeting in place, and therefore have your expenses under control and predictable, we can then produce forecasts of future profits. For example we might tell you that given your current income and expenses, you can expect a profit of £20,000 next year.
Budgeting helps keep your finger on where money is being spent in the company, and forecasting will help you plan for the future.