5 keys to manage online budgets
Online budgets driving you mad? You can reduce the headache and manage them with these 5 easy-to-follow keys.
Budgets are a huge part for any business so why are entrepreneurs not at all passionate about them? Budgets involve avoiding tragedy whilst realistically projecting into the next year. Let’s cover 5 necessary keys to manage your online budgets in an optimal way.
The absolute best way to tackle the management of your online budgets is by having a powerful ERP system in place that fits with your company needs.
How to make an online budget?
1. Understand what you need and why
This may seem like a no-brainer, however this is the number one mistake most business owners fail to do. It is necessary to spend some time to dive deeper into your business needs and truly understand them at the budget level, and then you can establish the requirements needed to meet them.
When analysing your needs, beware not to confuse the needs your company with your ambitions as an entrepreneur. It’s imperative that you identify, document, and confirm as accurately as possible the basic needs and build your budgets from them. When you’re satisfied with them, it’s time to project your future business goals.
2. Risk management and prepare for surprises
Differentiating between needs and desires is essential to understanding another key in this process; the more realistic you are, the better. With that mind frame, you’ll be able to easily identify a whole set of risks, problems and potential surprises. You should also ensure your budget is flexible enough to address any issues that may arise.
3. KPI control
Key Performance Indicators (KPIs) are quantifiable, concrete data that help to control online budgets more optimally. KPIs that you can use in your projects are;
- Actual cost (AC): this indicates the amount of money spent on a project until the date of quantification.
- Variation of cost (VC): this shows if the cost of the project us above or below the baseline established in the budget.
- Return on investment (ROI): this reports on the profitability of a project by showing whether the benefits have exceeded the costs or not.
4. Be transparent with your team
All members of staff must be informed about your online budgets, including their objectives, limitations and needs. This way each employee can perform their work in a way that positively impacts the final outcome of the economical balance. It will also boost moral and create challenges between teams to push everyone towards achieving success.
5. Amend your budget (if need be)
Sometimes, you get it wrong. So don’t be afraid to rewrite your budget; you may need to produce a document that adapts to your needs in the moment. It’s much easier to correct small errors that arise, rather than wait several months and have to correct that same error which has, by now, most likely become something bigger.
The best way to manage your online budgets is to review them, be realistic, and keep everyone informed. To clarify, when discussing online budgets, it’s essential that you have the right software to handle them. Using an online ERP that will contain other tools and link these budgets that you make to other areas of your business such as accounting, billing, or planning. Try Holded’s #1 Cloud ERP software for free now.