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finance business calculation with chart and Euro banknotes
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 mentioned definitions, the two  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-from the scratch to the finishing line. Both terms belong to the genre of accounting, where auditing comes under the perspective of bookkeeping. Effective budgeting leads to the promotion of an efficient business which conclusively provides maximum returns at minimum cost. Bookkeeping helps in carrying out effective budgeting tasks and aids in identifying weaknesses, strengths, limitations and savings of a business. Following are certain wonders of effective budgeting:

 

  • Utmost Expenses of a Business can be Planned through Effective Budgeting:

As stated by James LeMay-the director of Daigle and Associates with an accounting firm in Boston,” This helps you to be honest about what is coming so you can plan for it beforehand”. Budgeting plays a significant role while planning the transactions which are most likely going to take place in an enterprise in order to plan about the expenses of the company in a systematic manner. However, the technique is beneficial as it allows the allotment of resources while keeping the budget in mind as well as the estimated expenses.

  • Enlists Accurate Documentation of the Deposits made in a Business:

The technique can be applied through various accounting softwares which can be easily downloaded through online accounting websites present such as GnuCash or QuickBooks. These softwares help accountants in recording all transactions easily. Keep in mind that wrong entries can lead to incorrect results ultimately affecting the whole scenario of accounts in a business. This allows the keeping of accurate records of a business to avoid any inaccuracy in budgeting performed.

  • Ensures the Welfare of an Office:

Optimal budgeting and proper allocation of all resources and funds available in a particular business ensures the well-being of a work place so that management can say that their resources are being used for the proper welfare of their own business. Moreover, budgeting helps in reviewing a business’ profits 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.

  • Helps in Increasing Efficiency of Employees:

A certain amount of budget available can be appointed for the employees with high productivity.  This drives them to accomplish a company’s targets on time. A highly qualified and experienced team of accountants must be appointed to perform budgeting tasks in order to enhance the effective working of a business corporation. It’s employees must be treated with great care in terms of high bonuses for those that have proven their work.

Final Note

With the advancement of technology since the industrial revolution, people have moved towards the making of tools as well as softwares in order to make their lives easier in all perspectives. The 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.  Budgeting proves to be a wonderful aid in promotion of a smooth and successful 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.

 

 

Businespeople at panel discussion in board room

A good business plan and a budget are critical for every business and organization hence a structured and organized strategic plan should be made before budgeting.

What is Strategic Planning?

A strategic plan includes strategies of an organization for potential actions and operations, targets, guidelines, and sources needed. Its duration is 3 to 5 years or more. Current and expected market environment is also included. These marketing forecasts help in clearing a view about demand and supply assessment, market inflation and financial needs.

Strategic Planning and Tactical Planning:

Tactical planning includes determining exact objectives and resources that will be used to accomplish strategic tactics. Tactical plans are of two types:

  1. Long-term, for example, in some tactical plans, corporate policy statements deal with cyclic situations.  Short-term (1 to 18 months), are made to deal with specific situations or a particular phase. They are usually for single use. An example of a tactical plan is the annual budget which is used for a sole plan. A budget is the resource used to achieve goals of strategic and tactical planning.
  1. Quarterly and monthly plans are incorporated into the annual budget to formulate it more successful.

 The budgeting process is not strictly associated with strategic and tactical planning. According to the former CEO of General Electric, Jack Welsh, the most ineffective management practice of a company is the process of budgeting.  The disengage among the budget and the strategic planning is the most significant reason for an ineffective budget.

Here are several steps for a better connection between budgets and strategic planning recommended by Carlson:

  1. Executive-level must participate in the initial step of the budgeting process:

The individuals who are involved in strategic and tactic planning must be involved in a budgeting cycle to ensure formulation of an effective budget. There should be a clear connection between strategy and budget. Most strategic goals are achieved through the budget. The connection between strategic goals and the role of every employee should also be assessed. How the role of every employee can be helpful in accomplishing goals should be discussed at all levels.

  1. The budget cycle includes a long-term plan:

 The Annual budget is for one year only and outcomes of the business plan are not delivered within this short period.  A yearly plan should be a part of a business plan. In this way, the tactical planning of the budget aligns with strategic planning of the company and this connection should be validated time to time. Consequently, the level of goal achievement can be determined and any adjustments could be made if needed.

  1. Measurement of KPI success:

KPIs (key performance indicators) of achievement should be formulated.  They should be regularly calculated and discussed with all to determine level of goal achievement and any adjustments could be made if needed.

Validation of targets:

The percentage of successes should be determined according to the economic setting and better decisions should be made according to this information.

Review of strategic and tactical planning:

Strategic and tactical planning should be reviewed at least quarterly to determine their validity as a measurement of success. Organizations sometimes set idealistic expectations based on better past performance but a changed market environment makes their strategy flop. Periodic assessment enables organizations to make necessary changes to meet the targets successfully and within the stipulated time.

Key budgeting and planning points are:

  • There should be direct relation between budgeting and planning
  • All strategic plans are covered in the budget
  • How market affects budget planning

CONCLUSION

All of these elements are the root for creating the alignment of strategic and tactic planning to the budgeting process. The strategy is the planning to achieve goals while the budget is utilized to achieve this goal. For achieving goals, strategy and budget should be a true interlink.

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.

 

 

 

 

 

Smiling black and white coworkers looking at camera in the office.

An SME is a small or medium sized organization which employs less than 250 people who tend to produce a revenue of less than 20 Million Euro. Such enterprises have to face a number of strategic as well as tactical challenges which cover up the cloud of cunning challenges. It faces challenges in terms of technology, communication, finances, human resources and marketing. Such enterprises also focus upon the relationship marketing too. Among the several challenges which a small or medium sized enterprise face, following are the few crucial ones which can adversely affect the working of an office, ultimately causing major losses to the business:

  • IOT (Internet of Things) Challenges:

Internet of things has been introduced as the cloud of automation which is progressing with each passing moment in order to bring ease as well as betterment to human lives.  It’s focus is upon the implantation of sensors through various software into the hardware for the production of objects or machinery which can be further used in order to interpret and exchange data all around. Such devices are used in enterprises in order to transfer data throughout the office. For the use and implementation of such devices, complete knowledge regarding them must be known by the working officials of an office so they can operate the machinery effectively. Apart from this, companies must have affordability to fix these machines in their setup.  This would promote smooth as well as efficient running of a business in terms of transferring data in a secure way all around the office as well as to the external organizations.

  • Cryptocurrency:

With the advent of technology since the mid-17th century, the world has tilted towards the technological cloud from the scientific one, striving to bring optimistic revolutions into the globe with each passing moment to escort ease and betterment into the human life. “Currency” is one of the biggest innovations introduced into the world after dealing with barter systems and issues encountered by several businessmen, government officials and economists.  Hence, a system of currency was developed in order to ensure the terms of trade in a convenient manner where one can obtain a good or a service at the expense of value or currency it owns. Currency is considered to be the most commonly used medium of exchange in order to acquire everything existing around the globe in this present age of the contemporary world. Currency encapsulates further terminologies such as physical currency and cryptocurrency. Physical currency is the form of currency available in a physical state such as coins and bank notes or liquid asset.  Money is considered to be the most liquid form of assets one can have, while cryptocurrency is the form of virtual currency present in an antedate form that operates through cryptography by displaying attributes similar to that of physical currency. The currency is generated as well as monitored by its developers while only provided to a particular group known as a virtual group.  The currency proves to be an efficient use in terms of progressing larger transactions easily and instantly without any hindrances.

  • Budgeting:

Budgeting is an important task in the field of running a business efficiently.  It allows the most favorable allotment of all finances and resources present in an office a way to minimize cost and maximize profits. An SME faces challenges in designing a systematic budget, therefore accounting experts should be appointed in order to fulfill this purpose. Several bookkeeping softwares are available in order to perform budgeting tasks in a well-mannered way.

Final Note

SMEs are enterprises which face strategic challenges which can be overcome smartly by appointing an intellectual group of people who can work efficiently to produce high profits.  They can be further reinvested in order to generate higher benefits. Such enterprises might face several challenges, but the most major and effective ones are related to the technological cloud which can then be solved through hiring of an educated and intellectual staff.

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.

cheerful little girl holding piggybank with parents on background

As a homeowner, it is essential to keep on budgeting and saving. There may be nothing more infuriating than knowing there are bills to pay but not having enough to cover the amount due. However, if people were to really sit and look at their figures together, there is a good chance more cash could be found and rational variations made to the household budget for families to get ahead.

Household finances are not complex to manage if you follow a methodical approach. Few individuals truly follow the elementary values of financial management, which is one reason why so many people undergo from complications with debt. A budget basically displays how much money you have coming in and how those funds are consumed. It’s one of the most imperative gears in constructing a prosperous financial future, because it helps you get the most out of your money. If you follow these simple five steps, you can safeguard your household finances will always be steady.

1)   Budgeting:

The principal entity every household needs is a budget. You know how much you earn on a yearly basis and you may even know what your weekly income is. Do you know how much you spend each week on food, entertainment, gas and even coffee? You may not. The main stage to developing a budget is learning where you spend your money. Then, look for regions where you can practically cut back.

2)   Saving:

Your financial plan needs to account for savings. If you do not save any cash, you will run the threat of defaulting on lends if you lose your employment. You may even lack the shelter needed to provide for your retirement. At all times, it is sensible to have at least three month’s salary protected. This can guard you from losing your home, apartment or vehicle if you mislay your job. Communicate with a financial consultant about saving for retirement to learn how much you should be lying aside each month.

3)   Tracking:

Once you have set your financial plan and savings goals, you need to make sure you stick to them. Tracking your expenses is the only way to ensure your plans are being implemented. Nowadays, many banks offer online software databases that help you trail your money. Understand which system may work best for you. You will devote less time essentially entering figures into a worksheet if you can find an automated program that will track your household expenditures.

4)   Disputing:

Once you start tracing expenditures, you will note if there is any inconsistency between what you think you paid and what you were charged. It is very significant to monitor these items and match them with receipts, the contemporary way to balance a checkbook. You may not have to wait for your declaration each month, but you still need to compare charges with your private record. Saving receipts is the greatest way to make sure you have an authentic way to dispute a charge, if needed. Grasping any fault early is serious to moving forward with the process of having a bad charge removed from your account or catching identity theft before your cash is stolen.

5)  Holding Everyone in the Family Accountable:

Finally, your best struggles will only save you money and keep your savings in line if your whole household is on board. You will need to make sure they are alert of the financial plan and are doing their best to stick to it. This is a great technique to teach offspring about the significance of budgeting, involve them in the debate, and show them why saving or investing is important.

Final Note:

Regardless of financial standing or which generation you fall into, every purchaser can benefit from creating and managing a budget. A budget gives individuals an intellect of control over their money. Think of a financial plan as an economic foundation. Each being’s foundation is going to be diverse, just as each financial situation is different.

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.

Coin in piggy bank with text budget on paper, sunlight effect, business and finance concept, copy space. retro filter effect.

Budgets are an essential part of running any business competently and effectively. They function as a strategy of action for supervisors as well as a point of assessment at the period’s end. So how do budgets work exactly in the corporate world? And how does operational budgeting help the business to prosper and flourish? When most individuals think of budgets, they think of a typical domestic budget – given a set amount of cash, how much should be distributed to several expenditures? This structure generally works well for individuals, but in the corporate domain there is a lot more involved. Formalizing how much to spend on different expenses is only half the conflict. The other half is for a corporation to be able to efficiently judge its spending performance. Regardless of the type of industry, the capability to increase performance using budgets is a matter of life and death in the business world.  A Business program or Budget is very much a necessity for the smooth operation of any corporation.  It gives the association a delineate way to achieve the ends and their aims.

Planning and Function:

To achieve its objectives, a business must express its stratagem in a quantifiable method. The corporation must decide whether a project is financially reasonable, then link the company goals with the accessible resources. Corporate budgeting allows higher administration to cultivate a scheme that makes sense to those in the lower levels of the organization.

Think of your budget as a scheduling tool. Use it to accomplish your objectives by defining how much money you can spend on different features of your procedure.  Your periodic budgets should be archived so that you can revisit previous periods (for example, month-over-month or quarter-over-quarter) and estimate whether your corporation’s results are improving.  A master budget provides a synopsis of financial actions involving assets, liabilities, equity, revenue, expenses, and costs over a specific period of time. Owners first create a master or static budget with statistics based on planned inputs (sales revenue) and outputs (expenses).

Preparation and Efficiency:

Corporate budgeting works finest when the business keeps it clear and understandable, according to CFO Magazine. With more aspects to contemplate, more things can go wrong with planning and procedures.

Budgets are a prized tool for evaluating the performance of your business and the efficacy of your budget. Owners can use it to examine definite expenses, for example, as compared to the estimated expenditures. If there’s a large deviation between the two, the owner and the financial planner can review the budget for faults. Preparing a budget can be a lot to get your head around. All those figures spread among so many tasks over so many months can leave you dazed. But, it’s an important part of sustaining your business, as important as any marketing plan or publicity campaign. After all, you cannot plan for either of those unless you know how much money you can spend. 

Tools:

A corporation typically uses software to manage its communal budgeting process. The software shares the business’s budget with all the different departments, divisions and stores. This systematizes the conventions that each budget holds and permits the high-level supervisors to view the establishment’s overall performance. The business may use a simple spreadsheet to improve and monitor its corporate budgeting. However, specified corporate budgeting platforms usually work faster and assimilate better therefore reducing the resources the business must spend on corporate budgeting.

Final Note:

Despite its extensive use, corporate budgeting has its problems. The Harvard Business School even goes as far as to call corporate budgeting “a joke.” A business’s director may manipulate the numbers to make their performances seem superior, to reduce the quantity of work they must do, or to increase the extras they receive. This performance goes against the company’s interests. These glitches may even affect the economy beyond individual companies.

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.

 

 

Opening envelope containing paycheck

As an accountant for small business owners and families and the mom of three 20-something young ladies, I have had plenty of experience with living paycheck to paycheck and helping people who are in that stage of their financial life. Here are a couple of tips that will help alleviate some of the stress and position you to break the cycle:

Don’t borrow on credit

If you are living paycheck to paycheck you can hardly afford interest payments on top of everything else. An easy way to avoid borrowing is leasing or buying something that is not-so-nice for now. Remember that every-time you make a sacrifice to avoid a payment, you are laying the foundation for healthy spending and saving. If you need a car, lease the least expensive car that will meet your needs or buy a car that isn’t glamorous, but gets the job done. When deciding which option is best for you, be sure to factor in the insurance expense on a lease – which can be pretty high since it’s a new car – and the maintenance expense on a clunker. If you don’t need a car, don’t get one. Consider a bike or scooter instead.

Buy on sale

School shopping for three kids was never inexpensive. So we would go straight for the sale rack at the back of the store and make our rounds to every store they liked. Rather than shopping for clothes every month, shop once a season because the last seasons clothing was always on sale when they are bringing in the new stuff. Grocery shopping is a big chunk of the monthly budget but definitely less expensive than eating out. Make it a challenge to only buy items that are on sale. If you must eat out, go somewhere that does not require you to tip a server. Even if you want to treat yourself to good food and nice ambience, there are plenty of small deli’s and specialty food stores that have excellent selections and self-seating. Oh yeah, and drink water!

Budget and Save

Planning ahead is really important. You know that car registration, school tuition, or medical expense is coming – so plan for it. Find some amount that you can save and make it automatic. My daughter works at a restaurant part-time. She saves her tips tries to pay for her living expenses on her paycheck alone. After only 5 weeks, she had enough to buy a plane ticket for her vacation next year and now she’s saving for spending money. If you get a paycheck from your employer, use direct deposit and have a reasonable amount – $50 is better than nothing – per check deposited into a savings account while the remainder goes into your checking. Finally, know your spending. People who are aware of their spending tend to spend less. Check your bank account frequently and make sure you never overdraft – for some folks that habit alone will save them hundreds of dollars each year.

With a little planning and creative shopping, living paycheck to paycheck does not have to be stressful. If you can get comfortable with living this way – imagine how easy it will be to build your wealth and credit when you are earning more!
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.