How to Manage an SME Budget during COVID-19
If you are running a small business or an SME then you know that finances are the biggest drain on your profits. Your budget is important for staying in business and your bottom line, but it can be just as much of a headache. The good news is that with a little knowledge you can learn how to manage an SME budget easier and avoid many of the common mistakes companies make. Here are three tips that you should never neglect:
Give yourself a checkup
Every six months or so, do yourself a checkup to see where your company stands financially. This will allow you to see where your budget needs improvements. Many companies start off well financially but eventually end up spending more than they bring in. By checking your budget regularly, you will catch any problems before they become serious expenses.
Be realistic with expenses
Another key to being successful is being realistic with your expenses. Do not think that you can spend two thousand dollars one month and get away with it. Every dollar you spend counts. Do not blow several thousand dollars in a month, as this will lead to financial problems. Spending only what you can afford is the best way to build a long term business that will stay profitable for years to come.
Create a spreadsheet
Have a spreadsheet that list every expense you have, as well as the reason why you are spending it. This will help you work smarter, not harder. Once you know exactly what you are spending money on, it will be easier to find ways to save money on those items or to eliminate them completely. You will feel more in control of your budget and you will be able to take steps to change the direction of where you are going.
Work with your vendors’
When it comes to keeping your budget under control, it is important to work with your vendors. If they know what is expected of them, they will not go over the budget at all. Many vendors charge a percentage of your profits for every item that they purchase from you. It is vital that you work with these companies to make sure that the entire amount you pay them is kept to a minimum.
Know your taxes and be honest
Don’t try to hide any documents related to your business expenses. If you have to submit a tax return, be sure that you use the right forms. The more accurate and complete your tax return be, the sooner you will be able to get your refund. The sooner you can claim it, the more money you will save. When it comes to taxes, honesty is the best policy.
Manage an SME budget
When you manage an SME budget, there are several other factors that need to be taken into consideration. For example, it is important to work smarter, not harder when it comes to advertising. If you think that your business needs a television advertisement, do not buy them during the slow times, like before lunch. The public does not watch late during the day. It may be tempting to purchase ad space during the very busy times, but you are not likely to see the return on this investment very soon.
Another way to manage your SME budget is to make sure that all expenses are tracked and recorded. Without this type of record, it is very easy to lose track of where the funds are going. It is also important to understand the difference between invoices for a business. An invoice is the document that you receive from the customer for a product or service. An invoice lists out all of your customer’s expenses for services that you have provided for them.