All tradies understand the importance of budgeting on a theoretical level. But many believe they can’t do it because they feel that it’s too technical and complicated. As a result, many hesitate to prepare a plan.
But it’s not really as tedious as you think.
In fact, you can create a simple one-page budgeting and cash flow plan in three easy steps. Having this sort of plan can help you get a handle on your company’s finances.
1. Create a table or worksheet with four columns, labeled items, projected value, actual value, and change. The difference between your projected value and actual value shall be indicated on the last column.
2. Have as many rows as it would require for you to list all your sources of income and expenses for the whole month. Be sure to group all your income and expenses on one area and include a sum for both numbers.
3. Fill out the worksheet as you go. Provide your estimated budget for each item under the projected value column and your actual spending our income under the actual value.
Here’s a sample to illustrate. Remember that the idea here is to put all items or sources on the worksheet, so you have to update your plan every time.
|Item||Projected Value||Actual Value||+/-|
|Other sources (interest)|
|3. Bottom Line|
|Income minus expenses|
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