Your Budget vs. Actual Report

No one has a crystal ball that provides them with a perfect business plan. However, wouldn’t it be great to know what works and what doesn’t before it turns into a big issue? It’s a safe bet that every business owner wants their business on the track to success. Have you heard about the great business tool called “Budget vs. Actual report?

The budget is an estimate that reflects your revenues and expenses for the fiscal year. An actual report reflects the amount of revenue that was actually generated and the amount of expenditures paid during the fiscal year.

The first step is to clarify your plan because clarity is power. By creating a budget you will be more inclined to think about how each decision can affect other aspects of your business operations. The more clear-cut your plan is, the more likely you are to achieve your goals.

The next step is to begin making business decisions that will help you attain your desired goals. Just remember, some decisions will be good and may give you better results than you expected. And, other decisions will result in poor results. This is where budget vs. actual comes into play.

By comparing your budget and expenses to the actual results, you will be able to see how your plan is working and where you need to make adjustments. There may be times where you will need to focus a bit more on the areas that are not accomplishing your goals. This comparison can give you a very valuable understanding of your business.

Although it is a lot of work and may seem like a big hassle, to create a report for “budget vs. actual” at the end of each month, it will help you reach your business goals.

If you need assistance with a “budget vs. actual” report, contact our office at (260) 497-9761 to schedule an appointment with our Virtual CFO. At Summit CPA we offer multiple resources to assist you with your financial needs.