offer a complete financial accounting solution to save time, effort, money, resources for individuals and SME’s. Our personalised service gives us a better understanding of your accounting, tax and admin needs so we can optimise the services we provide you with.
Our tailormade service package ensures that you don’t pay for services you don’t need.
Contact Tax Shop to help set it up, provide the software. Or do it for you. Your choice.
The truth is, many entrepreneurs, NPO’s and small businesses far underestimate the value of budgeting and forecasting in business planning, not realising that it is more than likely one of the main reasons why businesses fail.
Shocking stats: 95% of businesses fail within the first 5 years.
Budgeting is particularly important for small-business owners who often operate with little tolerance for error; being even slightly off on cost projections or earnings can have a devastating effect on the enterprise.
Carefully constructed budgets enable a business to continually track where they are financial. This provides the basis for strategic, long-term planning for everything from current operating costs to potential expansion. Knowing where the budget stands opens up the ability to invest in new machinery, product development or equipment, hire employees and help set earning goals in line with the organizations’ corporate financial objectives.
Budgeting is important because it helps control spending, track expenses, save money, make better financial decisions, prepare for emergencies, get out of debt, plus make sure that the business has money for future projects and stay focused on your long-term financial goals.
Budgeting is the basis for all business success. In short, it helps with planning and control of the finances and operations of the business.
Benefits of Business Budgeting
Enables more effective money management.
Better allocation of appropriate resources to projects.
Improved performance tracking.
More likely to meet your objectives.
Plan for the future: set targets for the business as a whole, plus for the different departments or functionality e.g. sales, operations, production, funding, logistics, HR…
More informed decision-making e.g. about salaries, bonuses, benefits, overheads and operating expenses.
Problems identified before they occur – e.g. the need to raise money, get funding, address cash flow difficulties and create a cushion for unexpected expenses.
Increased staff motivation.
Greater potential to attract investors.
Easier tax preparation.
Open lines of credit, if required.
If you need to answer to a board of directors or an advisory committee, a detailed budgeting process will enable you to provide regular earning reports and status updates.
If unanticipated costs exceed projected earnings, appropriate changes can be made because they will be noticed sooner.
Forecasting is valuable to businesses because it gives them the ability to make informed business decisions and develop data-driven strategies. Financial and operational decisions are made based on current market conditions and predictions on how the future looks.
The goal of business forecasting is to develop better strategies based on these informed predictions; helping to eliminate potential failure or losses before they happen.
The more accurate the source data, the more accurate the predictions. Yet, avoid the danger of focusing on forecast accuracy rather than business results. Business results are key.
Improves cash flow planning.
Support in raising finance/ finding funding.
Time-saving.
Reduces errors and uncertainty on future events.
Can influence cost and delivery performance.
Enhances performance, productivity and profit monitoring.
Helps anticipate change within the market. Become active rather than reactive.
Purposefully direct your company. Informs management decision-making by providing a logical basis for planning and determining in advance the nature of future business operations and facilitates correct managerial decisions about the material, personnel, sales and other requirements.
Proper forecasting gives companies the opportunity to better understand market dynamics, customer and market behaviour, and provide the company’s functions with useful analyses and information.
Assess the success of your efforts. Determine the long-term viability or value of an activity.
Develop benchmarks for use in future forecasts.
The challenges of business forecasting often stem from poor judgments and inexperience. Assumptions combined with unexpected events can be dangerous and result in completely inaccurate predictions. Despite the limitations of business forecasting, gaining any amount of insight into probable future trends will put an organization at an advantage.
For example, poor sales forecasting and inventory planning can have a significant negative impact on the credibility of a business. When unable to meet demand, it leads to unsatisfactory customer experience, bad press and further loss of sales down the line.
Forecasting is a technique that uses historical data as inputs to find patterns and the direction of trends. Forecasting helps management make more informed estimates, projections and predictions into the future.
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