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Budgeting Essentials Blog

Helping you master the practical essentials of Budgeting, Cash Flow, Accounting and Debt Relief.
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Budgeting – Create a Completion Schedule

Creating an effective budget is not something that just happens.  You need to have a good knowledge of your business.  You need to take time to look at what you have been doing.  You need to take time to look at what you are going to do.  If you are going to get all those things done efficiently, you are going to have to have a schedule.  Today I discuss how to prepare a schedule for your budget.


When you are beginning your budget process for the year, you want to start with the end in mind.  There are two primary areas that you need to consider.  The most important one is what you want your profit and cash flow to be for the year.  This is the reward you get for taking the risk of being in business.  You need to determine what you want this to be.  I’ll be covering this in detail in a future blog post.  The other thing you need to consider is when you need to be done.  The obvious answer would be that you have to be done before the year begins.  That is true, but you may have some other things to consider that will dictate when you need to be done with your budget.

One of the things that will affect your timing is when your price increases go into effect and how much notice you have to give.  If you have a 60 day notice period on a January 1st price increase, you will need to be through most of your budget process by the end of October.  That means you should probably begin the process in September, depending on the complexity of your business.

Another consideration is allowing enough time to implement changes on both the revenue and expense sides.   A revenue example would be an apartment building that has a vacancy level that you want to change.  You may have to put in some extra effort to get units sold so you are where you want to be to start the new year.  If you don’t get your budget completed until a few days before the new year begins, you will not have any time to make adjustments.  When making a change in your expenses, you want to allow your employees time to buy in to the change or give them time to prepare for the change.  For instance, if you are making a change that requires adding an additional staff, you have to allow time for the hiring process so you can have the staff in place when you need them.  There was a reason you approved the additional staff, don’t negate that reason because the budget didn’t come out in time to implement it.

Once you have your goals set and taken into account what the overall timing needs to be, it is time to get each area scheduled.  The first area to schedule is your Revenue projection.  This is going to be the key driver to the process.  You can have your expenses projected perfectly for the year, but if they are not created in line with your revenue projection, the expenses will probably need to be redone.  Allow enough time to gather the information you need.  This may include doing a market study, doing initial estimates on special events/sales or just projecting the effect of a percentage increase.  Identify your major revenue categories and tasks to complete and put them on your calendar.

Now that the revenue is scheduled, your next area is your expenses.  This area is usually more predictable than your revenue.  Schedule your wage projections first, then the rest of the expenses.  You will need to know pay rates and increase dates for your staff.  You may need to do some checking with your suppliers to see what rates their products and services are going to be for the year.  This is also a great time to schedule contract and vendor reviews.  (for more on that topic CLICK HERE).  You can use your historical month by month expenses history to help you do these projections, so allow enough time to gather this information.  The more organized you are with your business records, the easier this will be to complete. 

To schedule time for your Capital Expenditures, take into account how many items you are thinking of buying in the next year and how large the purchase is going to be.  If you have a higher number of items or something that you know is going to take a lot of research to prepare a bid, schedule more time for this process.

At this point, the last areas you need to schedule are your Cash Flow and your Review and Adjust time.  If you keep your end goals in mind as you work through the budget process, this can be a shorter process.  Allow yourself enough time to review your work and make any necessary adjustments to achieve your profit and cash flow goals.

Make sure you give yourself enough time in the schedule for an unexpected interruption.  It is much easier to adjust your schedule if you have allowed enough time to work through the process rather than treating your budget like a test you are cramming for in school.  This is an important step in running a successful business, not just a common task to be completed.  You need to think through your assumptions so your budget becomes a well thought out tool that helps you put more money in your pocket every month!

If you would like a download of my Budget Schedule Planner to help you with budget planning, CLICK HERE so we can email it to you.


© 2018 Dan Heiland 2018 Kat Heil, LLC

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