If you are working for a small business and need to put together a spreadsheet for home budgeting, there are some things that you have to keep in mind. There are always going to be surprises for the first couple of months. Here are a few pointers for getting things on track.
Start with a monthly budget. This will give you a clear picture of what you are spending too much on. All of the numbers will be easy to see and you can eliminate any areas where you are spending more than you can afford. But, don’t get lost in the details as this is just a starting point.
Once you have your monthly budget, figure out where your money is going. Is it going towards expenses, or to debt? Most businesses have a loan balance, some to pay a large loan and some that pay only for interest.
A Short Guide to Managing Your Business Expenses
Take all the expenses and subtract the monthly income from your expenses. You now have your “tangible” expenses and their difference in their actual expense and the income.
In order to eliminate interest, your tangible expenses must be less than your monthly income. There are two ways to accomplish this. One is to create a lump sum with a variable interest rate.
The other way is to find out what your free cash flow is and then use that figure in the equation. Then subtract the expenses from your income and see if you can eliminate any of your expenses. Your goal here is to eliminate a few things that are going to eat up a large chunk of your income.
One important factor that you must keep in mind when working with your spreadsheet for home budgeting is that if your monthly expenses outrun your income, you will need to find a way to increase the income. Adjust your deductions and/or add to your income if necessary. You may need to borrow from friends and family, or even try to get a job that allows for an increase in income.
When you are reviewing your expenses, find out what percentage is going to your long-term cash flow and what percentage is going to your short-term. You want to keep all your sources of income equal to each other. Otherwise, you will either have to pay more for a shorter period of time, or pay more for a longer period of time.
Pay a little more to make sure that your long-term income will remain constant. Of course, this assumes that your business makes money consistently, which could change.
Keep your budget going through every quarter, and look at your revenue, costs, and cash flow. It may be difficult to adjust your budget from quarter to quarter. The best way to do this is to be able to check the spreadsheet for home budgeting.
Remember that your business has to survive as a functioning business that takes customers. You have to be prepared for any financial changes that may occur. Once you have used this spreadsheet for home budgeting, you will find that managing your finances becomes second nature. READ ALSO : spreadsheet for business
