When reviewing your company’s current financial situation, creating a new budget is typically a key component of being able to allocate your existing funds more appropriately. Re-evaluating your financial priorities frequently can help keep your professional spending habits in check. The following are some practical suggestions that can help you make the best use of your company’s funds.
Compare your current budget to your ideal budget. There are two simple questions you need to ask yourself when considering a new budget for your company:
- How do you allocate your money now?
- How should you be allocating it?
This is typically a matter of differentiating between what you want to spend your money on versus what you need to spend your money on. From here, you can consider things like whether you are currently investing too little or if you should spend more (temporarily) to pay off debts. When it comes to company expenses, consider whether you’re operating at a level appropriate to your means or if you could cut back on some small, unnecessary purchases that tend to add up at the end of the month.
Hire a financial planner who’s bonded. Professional finance planners can advise you on what kind of budgetary decisions will work best for your company. To feel more at ease about working with a new professional or agency, verify that the representative you’re working with has been bonded before you share financial records. Surety bond companies issue bonds as a way to guarantees compliance with industry regulations as well as professional performance. A bonded status shows that a neutral party (the surety) has found the professional to be reliable.
Manage company credit cards responsibly. First of all, be sure to make at least the minimum payment for all of your cards each month. Failure to do so will drastically hurt your credit. Avoid opening new accounts if possible, as it’s easy to overspend on new cards that don’t yet have interest rates and balances. Finally, figure out a reasonable approach you can abide by when it comes to managing various credit cards. For example, determine whether you should be using one or more of them only for necessities, only for special or emergency situations within the company, or not at all, so that you can pay off your debt as soon as possible.
Find ways to cut back on office expenses. The key to operating a strict company budget is to cut costs whenever possible, without being unreasonable, of course. Here you really have to consider what your priorities are and determine where exactly you draw the line when it comes to luxuries verses necessities. Sure, you could spend $400 on each leather chair you buy for the office, or you could spend $200 for an equally comfortable (but less stylish) model and save the extra money. Making the effort to find a cheaper office supplier could save you some major cash as well. Just be sure you always weigh cost versus quality, as well as the ROI you expect to get.
Consider your company’s net worth and investments. Even when your company only has limited funds at its disposal, increasing its net worth and investments should be at the forefront of your financial priorities. (An exception here would be if you’re working to pay off debts, in which case the majority of the extra profit should be used to pay off bills.) Getting into the habit of consistently saving and investing can be difficult, but increasing your company’s net worth a little each month will pay off in the long run. Doing so will allow you to collect additional revenue in the future and allow for a budget with more breathing room in the future.
Managing your finances under a new budget doesn’t necessarily require huge financial changes. Making the effort to monitor your daily expenditures can help you allocate your funds more practically.
Danielle Rodabaugh works at SuretyBonds.com, a nationwide surety producer. The agency’s Surety Bonds Insider blog provides consumers with a number of resources related to the surety industry.