How to Create A Business Budget for A Small Business In 2021?
Do you want to start a business or already own one? Then first you need to plan the business budget. No matter where you want to set up your business, be it in Singapore or any part of the world, all accounting companies give prime importance to the budget.
Singapore as of now is the leading market for both local and international entrepreneurs to set up a new business. Favorable geographical features along with business-friendly tax regulations have instigated top companies over the world to set business here in Singapore. If you want to start a business then budgeting is its central nervous system, and an accounting services company in Singapore can guide you in this journey.
Here is how you can create a business budget for a small business in easy steps.
Understand What a Budget Really Is
Budget is much more than just managing your expenditure. It helps you to make important decisions regarding various investments and also lets you chalk out areas that may need improvement. Thus, having the correct attitude is a necessity for planning the budget. If you have the right insight or knowledge then good. If not, you can always contact the accounting services provider to help assist you better.
Review Your Revenue
You may make maximum profit during certain months as compared to the others. Thus, knowing both the high and lows of your revenues is also essential in planning a budget. It is important to monitor not only your yearly revenue but also monthly, and if possible, daily. With the knowledge of your monthly revenues, you can plan for the low sale months in advance alongside being prepared for those high sale months.
Take a Look at Your Fixed Expenses
If you own a small business you need to monitor your monthly fixed expenses. This includes salaries, insurance, rent, utilities, and other monthly essential expenses. Including these fixed expenses will enable you to plan out the rest of your investments properly.
Include Variable Expenses
Incorporate variable costs like electricity, gas, allowances, and others whose values are not fixed while making the budget. Based on your monthly revenues, this cost may also vary. Monitoring these variable expenses after each month will help you to understand how your business fluctuates monthly.
Predict One-Time Spends
All the accounting companies in Singapore suggest monitoring one-time spending, especially for small-scale businesses. These expenses include your spending on emergent fixtures or allocating money for some upcoming event. Incorporating these costs into the budget and planning in advance will help you to layout the rest of the cost accordingly.
Put All Your Information into a Budget Format
After you have all the income and expenditure data the next step is to bind it all together in an orderly manner. Contact your accounting services provider in Singapore and invest in good budget software. This will help you a lot. But if in a dilemma, then you can always go for Microsoft Excel.
Use Your Budget to Stay on Track
Sweating over creating a budget might seem to be a hassle at first, but it is worth it. Financial planning and making a budget will give you a thorough insight into your business performance, and help your small business to turn big.
Accounting is one of the most complex and detail-oriented tasks, which requires lots of documentation, paperwork, and stringent procedure. The desktop accounting system used by many accounting companies in Singapore is no more in trend. It is outdated due to its several limitations and barriers. Today, multinational companies, corporates, and business houses prefer cloud accounting systems and software to manage their book of accounts.
Here are some of the reasons that state why large companies are now moving to Cloud Accounting Systems:
One of the greatest advantages of cloud accounting is the easy and mobile access that it provides. Cloud makes data and software easily available online at any time, anywhere. One can easily get the required access to their data within no time. Cloud accounting systems safely encrypt your data and files in a cohesive server. All you need is to log in from your web browser using your login credentials. The easy accessibility of cloud accounting has attracted large companies to adopt cloud accounting systems for maintaining company accounts.
Cost and time effective solution:
Desktop accounting requires a large setup with multiple computers, hardware installations, maintenance of the system, etc while Cloud Accounting does not require any huge set up all you need is a good internet connection to perform your daily tasks. Cloud Accounting is done using the cloud servers and therefore, there is no cost of IT infrastructure involved for the same. You can access your data and work at your convenience from your office or home as and when required.
Cloud Accounting is secure:
Accounting Company in Singapore gives utmost importance to the discreteness and security of the data and therefore Cloud Accounting is embedded with advanced features and watertight security to ensure no tampering or leak of data. The accounting information is encrypted on the source and saved in the cloud. So only, the selected employees and relevant people from the accounting team can access the data using confidential login details.
Work smarter with accessible data in the cloud:
Cloud accounting makes it easy to share and collaborate with other team members. It allows you and your team members or accounting advisory team to access the same data from any geographical location. Cloud accounting saves a lot of time by eliminating the need to go back and forth and exchange multiple emails. This is one of the greatest reasons why major large companies are hiring professional accounting firms in Singapore for Cloud accounting systems.
Cloud Accounting is Sustainable, it fosters no paperwork, and considerably reduces the reliance on extensive paperwork. By using Cloud accounting one can now directly send the invoices to the clients via email thereby, reducing the cost of printing and posting invoices. It can also speed up the payment process by cumulating all the bill and receipt information comprehensively.
Cloud Technology has revolutionized the internal systems of companies and individuals drastically. It has become a part of our daily lives whether we access our social media accounts, upload our photos, or perform an online bank transaction; cloud technology is everywhere. Incorporating cloud accounting can help large companies to systemize their accounting work and save on accounting expenditures as well.
What Is Traditional Accounting Software?
Traditional Accounting software implies on-premise accounting software that necessitates having one devoted hard drive where the accounting software is installed on the office premises. For this software to work, all the financial and transactional software is also stored on the hard disk for access. The end-user of the traditional software accesses the software and the associated database through an application that is installed on the PC / laptop located in the same premise.
Not everyone connected to the internet can access the data or software. Users from specific locations where the desktop application is installed and configuration of connecting to the hard disks are made can access the software and the associated database. Associating with the company offering comprehensive accounting services in Singapore can help you to effortlessly maintain your books of accounts and documentation.
What Is Cloud-Based Accounting Software?
Cloud-based accounting software on the other hand is accounting software that can be accessed over the internet through a set of applications. In cloud-based software, all your data is stored on multiple servers known as a cloud in contrast to traditional software where data is stored on company servers. This cloud-based accounting software provides the same functionality as traditional software through the internet meaning you can work at remote locations easily.
Difference Between Traditional & Cloud-Based Accounting?
Traditional accounting requires you to first purchase the software, install the system on all the machines that will use the software, purchase hard drives where the software and the financial data will be stored and so on. You thus need to purchase both hardware and software, whereas for a cloud-based accounting system you do not need to purchase the expensive hardware. All you need are machines and an internet connection and you are good to go. The cloud-based accounting software can work even on mobile phones with the internet. You have to pay for a monthly subscription for using cloud-based accounting software. A professional accounting company in Singapore is well versed with both types of accounting solutions.
As a company grows in size, the amount of transactional and financial data increases exponentially. To incorporate all the data, for traditional accounting software, you need to install larger and faster servers, thereby entailing a cost for expansion; whereas, for cloud-based software, additional data can be easily incorporated in the clouds without any costs. This makes a cloud-based accounting system easily scalable.
Since traditional accounting software is installed on machines directly connected to servers, the speed for traditional accounting software works faster compared to cloud-based accounting software where data transfer happens over the internet. However, a faster internet connection can easily improve speeds for the cloud-based system.
Real-time Data Updates
One of the important advantages of a cloud-based accounting system is access to real-time data for everyone. So, anyone located remotely can access data in real-time and help in decision making which is not possible for traditional software to do. Access to real-time data can easily improve the collaborative working of different teams in your business.
For a traditional system of accounting, there is always a risk of building collapse, loss of data due to power fluctuations, fires, thefts, hardware malfunctions or floods. The cloud-based accounting system is less vulnerable to such physical damages since the data is stored in multiple locations and generally there are back-ups taken. Cloud-based data is also protected from chances of attacks by viruses and data thefts. An accounting service provider company in Singapore will always take care of your personal data.
Which System Is A Better Option?
From the above differences, one can easily see that the cloud-based accounting system is much better compared to traditional accounting software. Shifting to the cloud-based accounting system is the current trend. Numerous accounting companies in Singapore provide a transition to cloud-based based on your requirements.