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Creating a budget and staying on it can be difficult. But to keep control of your finances, a budget is necessary. You can also be sure your money is going towards those expenses that are important to you.

It sounds pretty simple, but some find it hard to understand the importance of budgeting in our lives. If we take it step by step, we will realize that budgeting is not that complicated.   Check out America's Best Bookkeepers

Stage # 1: Compute your monthly income

The first step is simple. Take out your last paycheck to determine your monthly income when all taxes are deducted. The final amount will be what is deposited in your bank account every month.

In the case where you are self-employed or work on commission, consider the past 4 to 6 months to make an accurate estimate.

Stage # 2: Calculate all your fixed expenses

The next step towards making your budgeting plan is to jot down all of your non-negotiable expenses.

In the wise words of a financial expert and writer of Smart Moves to Grow Rich:

“Fixed expenses are those recurring costs that you must pay every month because they’re vital for your well-being or are commitments you’ve already made,” says Laura Adams.

Your fixed assets are your rent, car payments, and utilities. Make sure to take account of contributions for an emergency, as well as retirement fund under this segment. These are expenses that should be taken as an indispensable cost. Check out America's Best Bookkeepers

Stage # 3: Estimate your variable costs

Once you reach this stage, it is now time to plan your extra expenses. These expenses can include gym memberships, clothes shopping, money spent while going out, or on hair appointments.

Your variable expenses are all those costs that can vary every month or are flexible. The key is to precisely forecast your variable expenses by taking out your past spending records. In case if you were not keeping track, opt for downloading a budgeting app. Once you connect your bank accounts to your app, it will automatically categorize all your past expenses. You will have the entire month of spending information at your fingertips.

 

Now that we have sorted out how to gather the information of your variable expenses, you need to examine your habits. After doing so, you should create an expenditure guideline. Categorize those areas where you are draining the most amount and question yourself if you can reduce those expenses in your budget.

Stage # 4: Assess whatever is left

Check out America's Best Bookkeepers After you take away your monthly variable and fixed expenditures from your monthly income after-tax, the amount you have remaining is called your discretionary income. The formula will be:

Discretionary income = monthly income – expenses (including fixed and variable)

Those who are familiar with the concept of bookkeeping will have no trouble calculating their budgeting and their discretionary income.

This is your leftover money that ideally should be kept towards long-term plans, such as saving to purchase a property, or keeping some money away for retirement.

It should be your goal to increase your discretionary income as well as make savings of the highest importance over spending. Decide how much you would like to conserve each month and determine where you should cut back.

We all have many wants and needs. In this world, we are all rivals competing for limited resources. Therefore, we need to decide what is the best method we can implement to balance our current expenses and steady our savings needs. This way, we will never spend extra than what we make.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Financial reports and statements are of the utmost importance when it comes to tracing the financial vigor of your business. They are used to gauge present and forthcoming fiscal conditions, which direct policy and allow for informed decision making. Budgeting and forecasting are the reports that contemplate information based on historical, existing, and anticipated financial situations. This information will then be further used to classify future possibilities and expenditure trends concerning government policies and the economic environment.

A forecast is an essential component of an annual budget. An efficacious forecasting model allows for better decision-making and maintaining financial discipline. While you may often rely on bookkeeping department to prepare the financial reports, it is imperative to have a clear picture of the process yourself, so that you can keep a keen eye as well as ask the right questions when required.

Before you can start budgeting or forecast future scenarios, you must have specific information at hand, which broadly would come from your financial statements. Cash flow, income statement, and balance sheet are 3 of the most vital reports that you will need. For startups and businesses who are new to the market are required to have feasibility reports, which can help in decision making at a certain level. Check out America's Best Bookkeepers

Financial reports

Budgeting

A budget is a comprehensive financial framework of yearly future projections by a business. It will entail all the information related to business revenues, cash flows, expenses, and financial stature. The financial statements are used to collect this information, which is then combined in an orderly manner to make sense out of it.

The size of a business will determine the exact strategy that should be used for budgeting. A more significant business would require the integration of multiple departments to form a perfect alignment for accurate results. Smaller companies may budget themselves or hire a bookkeeper for the purpose as lesser variables need to be catered to.

Most of the budgets are static, which means that they are only created once. However, due to rapidly changing market situations and other factors, some business industries use continuous budgets that are updated according to the latest developments. Closer attention to detail is required to maintain such budgeting procedures.

How to use budget

Traditionally, a budget has been used as a management tool, which is used to compare data from financial reports to the projections. See if the revenues and profits are consistent with the budgeted amounts, or have the company been overspending in certain areas? Answers to most vital questions about your business are obtained from the budget.

Entering realistic numbers while making a budget will gather you accurate results that can be utilized for decision making.

Forecasting

Forecasting is generally performed at the top tier by the decision-makers and is widely done to envisage revenues, expenses, and other critical details of the business. It can either be for a short term or long term depending upon the requirement and scale of the company. A more extended forecast is more concentrated on a strategic business plan, while the goal of shorter forecast models is concerned with operational purposes. Production planning, inventory management, and sometimes even the bank loan terms are successfully forecasted by businesses that have a defined long-term vision.

Financial reports are required to obtain the necessary data for the projected forecasting model. As your business fluctuates throughout the year, forecasting helps you to adjust your spending patterns and production volume accordingly. You should always forecast for all three possible scenarios that include optimistic, pessimistic, and most likely. This type of forecasting will allow you to change your current disposition based on the latest information. The forecast should be shared with all the key managers so that everyone is on the same page.

While budgeting and forecasting are diverse functions, but have subtle interdependencies. A good forecast feeds the progress of a sound budget. During the year, linking the most recent forecast to the budget for the rest of the period is essential to cope up- with the changing business environment in this day and age.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

The lack of financial education is a big problem in the population. It also affects more certain sectors. Many of these problems are due to ignorance or improper use of services such as paying only the minimum on the card, borrowing without planning to pay for it, etc.

Financial problems

7 out of 10 people face issues in their personal finances. Like not arriving with your salary at the end of the fortnight or always staying in debt. These are some of the reasons.

Bad financial education

The lack of financial literacy is reflected in a bad economy or bad money management. This lack of education is because we do not have the tools or were not given to us at an early age. In addition to this, the institutions do not have clear information about their products and services, which makes understanding the subject more difficult.

On the other hand, this lack of understanding makes people easily fall into frauds such as the pyramids: the flower of abundance, family batches, or loans to people who are not registered and who probably end up taking all their savings. Etc.

Excessive consumerism

Consuming without need, that is to buy objects only by immediate desire, is one of the biggest problems in the population. People seek to satisfy immediate desires without thinking about what consequences this brings in the future.

You should plan your purchases and allocate an exact amount of money, in addition to adjusting to that amount and not exceeding your economic limits. Living a life according to our salary is essential. You should also take care not to get carried away by advertising and do an internal analysis of the things you need and the things you only want.

Possible solutions:

Try to follow the tips to improve your financial problems.

Save and invest

We have mentioned it before, and it is the primary basis for building a good heritage and developing healthy finances. Save 10% of your salary and use this formula: Income – Savings = Expense.

Saving 10% is the basics. However, it is always advisable to save up to 25% of your salary. It would help if you had goals such as percentage for retirement, another percentage for possible vacations, etc. It is also necessary to discipline yourself when you have savings, give value to money. It is not enough to keep it, but we must grow our heritage. By this, we mean the investment.

You can rely on a financial advisor and, of course, research on the subject.

Learn about finance

Although in schools we do not receive education about personal finances, nor at home, as adults, we should be interested in learning from them since they will accompany us for the rest of our lives and depends on them the quality of life we ​​want to lead.

If you have internet access, you can search for tutorials or an online book that you can download. Finance blogs always have useful guidance and advice for you.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

There are many occasions when we consider that saving is a very complicated task, or worse, it is not necessary. However, as time goes by, we notice its importance. When we are parents, we understand that we must be aware of when the proper stage is to impart this teaching to our children.

Although we must take into account the age of our son, since we cannot treat our 4-year-old child as well as another of 11, there are a number of generic recommendations to teach them the foundation of domestic economy.

 

Tips to save

  1. Create responsibility

You would not want to create in your child, an overwhelming feeling of constantly needing to save, it is simply a learning exercise that by its constancy will give you results: establish a small monthly or weekly payment.

This is excellent advice to save because they will learn how to organize their economy, just as parents have to do with their salary, with which they must face all household expenses and the expenses of the children.

 

 

  1. Set limits

It is a good idea for children to understand that money is limited, and that if they choose to buy something, they can no longer use that money for anything else. 

This will show them that they must think about what to spend and properly use the money they receive. If they spend the money on lollipops they will not have money for gum, it is that simple.

 

  1. Explain that the bills are not the leaves of the trees

Where the money is spent daily, should not be a wonderful mystery for our children. Tell them that this is the result of the effort parents must make each month to get it.

This creates awareness in children, in no way does this matter try to generate alarm, but children should be aware of what it costs to earn it and how quickly it is spent if finances are not budgeted well.

 

 

  1. Teach them to create a budget

Effective advice is to save based on your monthly pay, help them to develop a simple scheme to guide them on the forecast they should take to spend money effectively and productively in thirty days.

Check with them at the end of each month to see how they stuck to your planning. It is not a matter of being very strict, but of transmitting the importance of organizing with what falls in our pocket. Seeing in black and white where the use of resources is channeled each month, it also helps them to become aware of it.

 

 

Extra

Tell them why it is good to write down monthly expenses. This is good advice to save because it is a way to better control the money we sometimes spend with extra spending on things that may not even be needed.

With this advice to save, we realize the amount of expenses we make every day without even repairing them.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Effective budgeting refers to the optimum allocation of resources in order to operate several functions of an office in a well-organized manner, whereas bookkeeping refers to the record keeping of all transactions which take place in a workplace. As illustrated by the above, the two definitions can be related in a simultaneous order. Budgeting requires the allocation of resources while bookkeeping requires the record keeping of the transactions which take place from the allocation of funds to their spending, basically from scratch to the finishing line. Both terms belong to the genre of accounting where auditing comes under the perspective of bookkeeping. Several bookkeeping techniques have been designed by accounting specialists in order to operate record keeping in an organized demeanor. The following are certain bookkeeping strategies, tools or techniques which can be used in order to help out a company.  Creating future budgets for the findings of transaction will help in determining the requirements, surplus or shortage of amount allocated in a particular department:

  • Utmost Expenses of a Business must be Planned Beforehand:

As James LeMay, the director of Daigle and Associates Accounting firm in Boston, said it: “This helps you to be honest about the fact that it’s coming and plan for it”.  This technique plays a significant role in planning about the transactions which are probably going to take place in an enterprise in order to learn about the expenses of the company. It is similar to that of budgeting, which allows the allotment of resources while keeping in mind the budget as well as the estimated expenses.

  • Accurate Documentation of the Deposits made in a Business:

The technique can be applied through various accounting softwares which can easily be downloaded through online accounting websites such as GnuCash or QuickBooks. These types of software help accountants in recording all transactions easily.  Always keep in mind that the entries made must be correct, as wrong entries can lead to the wrong results ultimately affecting the whole scenario of accounts in a business.

The above mentioned bookkeeping techniques mention the similarity among the two terms bookkeeping and budgeting.  Budgeting is used for the appropriate care taking of what has been allocated per the available resources and requirements in a particular department of a particular business. Effective business can lead to the efficient working of an office. The following are a few advantages of effective budgeting for businesses:

  • Ensures the welfare of an office:

Effective budgeting to the optimum and proper allocation of all resources as well as funds available in a particular business ensures the well-being of a work place. Management can say that their resources are being used for the ultimate well being of their own business. Moreover, budgeting helps  in reviewing a business’ profits and where it can be explored through the resources left out of the ones allotted for the running of a business. These resources usually come from the profits earned by a business association.

  • Evaluates the performance of a company:

A certain amount of budget available can be appointed for the bonus of employees which helps out in their productivity or drives them to make them capable as well as competent enough to accomplish company’s mentioned targets on time.

Final Note

With the advancement of technology since industrial revolution people have moved towards the making of tools as well as softwares in order to make their lives easier in all perspectives. Field of Accounting & Finance has also progressed in an optimistic manner in order to make businesses run smoothly as well as efficiently. Budgeting and Bookkeeping are two important terminologies which can be used in order to maintain the order of balance in a company’s accounting department. The two terms are interrelated and useful in the cloud of accounting & finance.

 

 

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file, critical financial documents and back office tools in an efficient and secure environment. Complete Controller’s team of US based accounting professionals are certified QuickBooks™️ ProAdvisor’s providing bookkeeping, record storage, performance reporting and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay services. With flat rate service plans, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Man using calculator and calculate bills in home office.
When you are planning to save money, you will have to account for all of the transactions and circumstances that currently concern your life. Learning how to save and manage your money at a young age will equip you with the skills to budget your money at any age. When you are young, there aren’t any strings attached, which gives you the liberty to experiment and come up with a plan to budget for your expenses. 

Making smart money moves will ensure that your financial health stays in balance and you have enough set aside for unforeseen situations. 


Budgeting your Money at any Age – The 20’s

The 20’s is a transitional period for students, as they are moving on into their salaried life. For 7 out of 10 students, the average college debt amounted to $30,000 in 2017. Paying off this debt will most likely take years and a highly robust budget management. While budgeting, you must ensure to account for the loans and put aside enough money to pay them off as early as possible. Budgeting for your rent and other living expenses, along with the debt, takes serious effort and money management skills.

Cut back on Non-Essentials

Budgeting your money at any age requires you to make a realistic budget which takes into account even the smallest of expenses. Write everything down in a journal or use a mobile application to keep track of your daily expenditures. Before you can actually start creating a budget, you will need sufficient data from your daily expenditures. Once you have data to explain your spending behaviors, it will be easier for you to set limits on some of the items that are related to entertainment, clothing and other luxury items. These are counted as non-essentials and, once you are accustomed to living without them, you will not even feel the difference, however, it will significantly cut down on your costs.

A 50/30/20 rule is often a good way to manage your expenses. 50% of the money should go to essentials, 30% can be allocated to your wants, while the remaining can be put aside as savings to pay off debt or any other purposes.

Get a Savings Account

Planning to get your own car or a house may require you to save a lot more than 20% of your income and may also require getting a savings account. Forget about the money you put aside into this account and only resort to it according to the plan. Find a savings account that offers a higher interest rate.

Budgeting your Money at any Age – The 30’s

Ideally, once you are in your 30’s, you will have adopted healthy budgeting habits and there will be no more issues related to late payments, unnecessary credit card usage and keeping track of your expenses. This is a career transition phase and there is a high probability that you could get married and have a family. If so, managing your finances becomes even more significant.

Open a Retirement Account

Amidst all the money management paradigm, you must start making contributions to your retirement account. The IRS retirement account is a great option in the case that you do not have an employer-sponsored retirement account. This is one of the most critical times in budgeting your money. Setting up a retirement account at this age will ensure that you put enough into it for a better future down the road.

Emergency Fund

This is something that you should pick up in your late 20’s and carry it forward into your 30’s. You never know how things could turn out, so it is better to be prepared rather than sorry. In case you have not saved up for an emergency fund, you may end up dipping into your retirement account or maxing out your credit cards, which we assume you would clearly not find desirable.

Budgeting your Money at any Age – The 40’s

Whether you have settled into your family life or are still passionately pursuing a career, the 40’s is the best time to lean towards investing money and generating income. This will ensure that you are generating enough side income to pay for luxury goods and fulfill your desires. Making smart investments is key and you should never put all your eggs in one basket.

Generate Alternate Incomes

Even if you are happy with your career advancements and saving enough money for bad times, we suggest that you invest your money into stocks, real estate, trading or any field that is related to your expertise. It will allow for you to maintain a healthy family life while catering to all of your additional expenses. Both your short and long-term goals can be achieved quite early, given that you make smart investment decisions. The best strategy is to diversify your investment portfolio to minimize the risk and avail all of the benefits of budgeting your money.

Revise the Budget

Your saving and spending goals need to be revised amidst growing expenses as you may have a family to look after now as well as life insurance, medical bills and paying off tuition fees.  This can be an arduous task if you fail to make necessary budget amendments.

Budgeting your Money at any Age – The 50’s and Retirement

Now that, hopefully, all debts are paid off and there are no more tuition bills remaining, you can shift your focus towards retirement. Get a hold of your finances and plan exactly for how many more years you want to work and get into some real investments in the areas you have benefited the most from your recent experiences.

Reconsider your Choices

This is the time when you should really start doing what you wanted throughout your life but have been unable to do. For example, if you wanted to travel and couldn’t, you could plan a trip. Make some adjustments in your lifestyle to account for the travel expenses, as we expect you to be a pro at budgeting your money by this age.

Consult a Retirement Planner

Though you have learned to manage your own money by now, it can still prove beneficial to have a second opinion. Consult with a retirement professional and discuss your investment decisions and options. You might be missing out on something which could dramatically increase the return on your investments.

Following the above mentioned budgeting tips will ensure that you retire with grace and freedom.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

Look at this. Happy loving couple is using laptop at home. Girl is pointing finger at screen and smiling
The decisions we make on a day to day basis can have serious impacts, good and bad, on our marital life. Financial disagreements can harm your relationship and ruin the beautiful bond that you share as a married couple. According to a recent study, the leading cause of divorce has been identified as financial disagreements. While it is impossible to expect two parties to agree with each other all the time, it is crucial for married couples to realize that harmony and peace can be maintained, even during disagreements. Marital harmony can only be achieved when the two people make stable decisions and work together to improve their current circumstances. 

If money has been the leading cause of arguments between you and your loved one, it is time to fix this issue once and for all. Start by creating an appropriate budget, as it will help you avoid countless money related issues in the long run. You need to think and plan strategically, as money issues can soon turn into emotional issues that have the potential to ruin your marriage for good.

1. Define Clear Goals and Share the Same Vision

The first step towards achieving martial harmony is to define clear goals that both partners can communicate with each other. Sharing the same goals for the future will allow you to set your priorities straight and begin saving to achieve those targets that you have in mind. The real path to fulfillment lies in sharing a similar vision for a prosperous future. Therefore, you need to align your views, beliefs, and values to work towards a common purpose. Without a proper vision in place, how do you even expect to follow a common path?

Not having a proper vision in place leads you to a state where you want ‘more’ of everything, which keeps you from feeling content. You cannot expect to build a harmonious relationship together if you do not feel at peace. Following a common goal or purpose will give you the clarity that you need to make appropriate financial decisions.

2. Create an Appropriate Budget and Stick to it

Seeing the way financial issues have affected marital relationships, there is absolutely no doubt in the fact that budgeting is a key to marital harmony. Just like bookkeeping, budgeting can now also be done online. Even if you don’t know the specifics of budgeting, there are various apps and tools available online that you can use to form an accurate budget which is easy to follow. Here is a list of all of the top budgeting apps of the year:

  • Mint
  • PocketGuard
  • You Need a Budget (YNAB)
  • Good Budget
  • Mvelopes
  • Home Budget
  • Wally
  • Level Money
  • Spendee

Budgeting will allow you to identify the areas where you are spending excessively, enabling you to limit those unnecessary expenses. It enables you to form the right habits that will benefit you in the long run. Once you have formed a unified vision and share common goals, it will be easier for you to work in coherence with your partner and cultivate better spending habits to accommodate that vision. Moreover, you will be able to hold yourself accountable for your spending and will make conscious purchasing decisions.

3. Learn to Live Within Your Means

No matter how practical your strategy is, it will remain ineffective if you do not learn to live within your means. Your primary goal should be to plan your financial management strategy according to your means. Going overboard or reckless spending is only going to harm you in the long run. Therefore, you need to allocate your finances in a better manner and adopt a balanced approach if you want to achieve marital harmony. Both parties need to stick to the budget and refrain from over-spending or spending on useless things. If either person is spending recklessly, you need to sit down and discuss the issue to find an appropriate solution. It might not be an easy topic to tackle, but it will benefit your relationship in the long run.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Group of young business people have meeting in office. New plan discussing. Four persons. Intentional lens flares
Setting budgets, saving money, and regularly contributing a tiny portion of income to your retirement account can not just help you meet your financial emergencies but also allows you to secure a safe and healthy post-retirement life. It is true that saving money on a regular-basis is a tough job for most millennials as they lack money-management and budgeting awareness. Creating an ideal budget for the month is not an alien job, all that you need to do is to stick to the devised budget the way you have planned or intended it to be.

Money-related issues can cause you a great deal of stress, especially when you have to support your entire family with many mouths to feed. To stay on top of your budget, you first need to have a well thought out brainstorming session for sorting things out like your monthly income, monthly expenses, anticipated saving benchmark and other similar things. Budgeting doesn’t have to be that hard. It all depends on the motivation level of a person; whether or not they truly want to save money for hard times. Setting your monthly saving targets can help you save a significant portion of your money which could further be invested somewhere useful or help in financial emergencies and difficulties.

Look At the Bigger Picture

For ideal budgeting, you need to learn the art of the game first for staying on top of your cash flow. Millennials who are already exposed to various ways of spending money now need to plan sensibly and make a budget wisely or else, they will never be able to save money at all. It doesn’t matter what tool or technique you consider to use for ideal budgeting, as long as you know the significance of making a budget—you are never in the ruins.

Let’s suppose you are using a budget spreadsheet. You will have a better understanding of your finances and where your money is going each month. Also, you will feel more in control of your finances which will ultimately get you one step closer to meeting your financial goals. According to studies, most millennials face financial traumas early in their professional careers because they fail to manage their finances properly. A lack of money-management skills begins with lack of planning and motivation to save money for meeting financial problems. Those who regularly contribute to their retirement, 401k, or IRA account can enjoy their post-working life more than anyone else because they will have the financial security and safety to make the most out of it.

Create a Budget

Creating a budget plan for the month allows you to live comfortably within your means. You need to precisely know your current financial status and how much you can afford to spend in a month. For that, you need to set both short and long-term goals for creating the right plan for ideal saving and budgeting. This indicates that planning and budget forecasting is critically important for creating a successful budgeting plan. According to research, those who have the habit of saving can have a healthy, more stable, and secure future.

Stick With Your Budget Strategy

Once you have a clear picture of the ins and outs of your cash flow, you need to refine your budget strategy. Tightening and cutting your extra expenses will help you save more which means that sticking with your budgeting strategy and plan is ideal in every sense. First things first, always pay your debt. After that, you need to set your priorities. There are certain unavoidable expenses like utility and household bills which cannot be avoided and that cannot be controlled. However, you can cut back on grocery and shopping bills by limiting your spending habits.

Get Help from a Budgeting Expert

If you are not good at numbers or setting up a proper budget, you can hire the professional services of budgeting experts or planners. From bookkeeping and inspection to planning, they will have the creative vision to provide you a workable monthly budgeting plan.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Grass growing in the shape of an arrow graph, inside a transparent piggy bank, symbolising the care, dedication and investment needed for progress, success and profit in business.
The structural and economic strength of a business is directly related to its financial efficiency. Finance is the fundamental base of any business corporation which tends to establish strong infrastructure, enabling smart operations of a company. Financial management owns intrinsic significance in terms of providing a strong system to a company which is achieved through effective budgeting. The equitable allocation of all resources available to promote the smooth working of all departments in a harmonious manner is known as budgeting.

Budgeting is the strongest part of financial management. It plays a vital role in the strategic planning of a company which ensures appropriate financial and operational activities to be performed efficiently in order to increase profits. As financial management has substantial significance, business owners are advised to hire financial experts who can deal with numerous contemporary techniques used for budgeting efficiently. Among contemporary budgeting techniques, bookkeeping is the most trusted which allows the tracking of all transactions a company has made or plans to make. It makes decision-making and future planning of an organization easier and more credible. Moreover, bookkeeping allows an evaluation of all activities and tasks which have been performed in a company and identifies loop holes to be covered in the future to avoid any serious concerns which could damage the establishment. The following postulates shed light on how budgeting plays a significant role in strategic planning.

  • Formulation of Activities

In order to run a business corporation smoothly and maintain its symmetry, it is necessary to capture the bigger picture of all activities and tasks performed under its flagship. Effective and efficient measures are required to administer all of these undertakings. Budgeting helps in formulating all activities taken place in a company on a single platform and measures how effective and efficient these tasks are performed. Identifying the loop holes present allows entrepreneurs to be careful and vigilant in the future.

  • Drawing of the Goal Map

For a company to achieve its aims, it is necessary to plan them during the initial steps. Here again, budgeting plays an important role in terms of providing monetary stance to the strategic plan drawn by a company, enlisting all of its goals to be accomplished in a particular period of time. Appropriate budgeting enables business owners to draw a goal map which provides all targets of a company and guidelines to hit them. In the case of inappropriate budgeting, a company might face big losses.

  • Makes Decision-Making Credible

In order to gain maximum profits at minimum cost, the opportunity cost of a company is to be reduced. Reduction of opportunity cost demands an eagle’s eye view which can be apprehended through smart budgeting. A close view to all undertakings or tasks held in a company allows financial experts to identify apertures present, ultimately making  future decision-making credible. Entrepreneurs or business owners, after keen observations, will tend to make better decisions when encountering previous mistakes, conclusively achieving their strategic plan in an optimistic manner.

Final Note

Strategic planning is the key component of a business’s success. All targets to be achieved and guidelines to attain them are planned under the flagship of strategic planning, hence, it is to be planned in an intellectual way. Budgeting plays a vital role in achieving this strategic plan as it acts as a strong support in terms of formulating and processing this plan to a successful end.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

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Have you just entered the entrepreneurship world? If you’re scared of accounting operations (which who isn’t?!), dig right in and learn the most important aspects below. Remember, it’s the accounting operations that continue to cause the revolution of information, which turns the economy of the world up and down. As an entrepreneur, your aim is to have a higher return figure than the figure of the investment/capital used. The reasons that an entrepreneur needs to learn about accounting and finance is explained in the following three points:

1.  Making future predictions for the business

2.  Making effective time, cash, and energy commitments for customer attraction and delivery of efficient goods and services

3.  Measuring and reassessing the progress for a more profitable behavior, reporting positive progress for investors, and changing direction with critical evaluations.


Entrepreneurs that aspire to make a big mark in their field need to grasp the latest tools needed for their accounting operations and finances.  These vital accounting tools allow you to have:

  • A clear demonstration of the results of the company’s activity to time
  • Confidence in the future for bankruptcy prevention
  • Timely submissions of reports to municipal authorities
  • Monitoring all available possessions: material, labor and financial
  • Proper planning for company’s activity

Easy 8 steps to Accounting Basics for Entrepreneurs

1. BEST ACCOUNTING METHOD FOR SMALL BUSINESS

The first thing you need to figure out is your business accounting method for efficient bookkeeping.

There are two methods: cash and accrual. The primary difference lies in the recognition of economic events by a company.

In the accrual accounting method, it matters when money is earned and you record transactions regardless of the fact that your customer hasn’t paid yet. The business must use this method in the case when:

  1. There are sales of more than $5 million a year
  2. There are gross receipts of an inventory of items of $1 million a year
  3. The business is a publicly held corporation

In the cash method, you record transactions as they occur, when the cash changes hands. It is the best and the simplest method for starting with a small business.

2. KNOW WHAT KIND OF RECORDS TO KEEP

You should be well aware of the type of records that you need to keep.

Legal documentation. Trade licenses, permits, sale tax licenses, DBA certificate, or any other documents which are legally significant for company activity. These documents should be stored somewhere safe and be kept accurate and up to date. The location of both online and offline documentation should be known.

Supporting financial documentation:  Source documents are of great worth for a company because all bookkeeping operations are based on them. Supporting financial documents include contracts with counterparts, receipts, payrolls, cash registers cash, and several other documents associated with the business area.

3. PROPER RECORD KEEPING

Transactions, sales, and profits should be maintained properly. Records of outgoing and incoming payment, funds movement, paychecks of employees, liabilities, taxes, overhead expenses, and operating costs should be maintained. Documentation of cash that comes in in the shape of costs for the digit of material, products, and services you sell and when should all be properly kept.

4.   DOCUMENTS MANAGEMENT

All documentation of an entrepreneur should be well organized to reduce mistakes. Bookkeeping should be updated and arranged.  Common rule of thumb is that you can never document “too much”.

5. SEPARATE BUSINESS ACCOUNT

Personal and business accounts must be separate to have a better awareness of business expenses and taxes.  When the two are mixed, it is very hard to discern between what are personal income/expenses and what are business income/expenses.

6. BALANCE SHEET

To determine the financial health of a business, a balance sheet is a must. It provides information of assets, liabilities, and equity.

 

7. SELECT ACCOUNTING SOFTWARE

Every entrepreneur should have accounting operations software to manage more effectively and efficiently. Software for small business are available online and are truly catered to each and every business out there.

8. ACQUIRE PROFESSIONAL ACCOUNTING ADVICE

Take support from a professional accountant and bookkeeper for the best bookkeeping practices. They will guide your business to control transactions and recommend changes for better growth. They are also responsible for setting company establishment. For building a better understanding of transactions, a well-oiled bookkeeping system is a must.

CONCLUSION

It is vital for entrepreneurs to have, at least, a basic understanding of the accounting and financial practices of their business.  Whether your bookkeeping is outsourced or done in-house, it is crucial that effective financial management is practiced to ensure the success of your business.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.