SME News March 2018

8 SME NEWS / Q1 2018 , Financial management is key to a successful business. All corporations must have a realistic budget in place and detailed knowledge of the company cash flow for longevity. Without a clear outline of your budget - including sales forecast and expenses - you’re almost certain to fail. For SMEs and startup companies, in particular, there is little room for movement without a budget plan. Business Rescue Experts, leading insolvency practitioners in the UK, have seen many companies fail to implement a budget and suffer severe consequences, and are sharing an extensive guide to planning a budget with technology to revolutionise the process. How Technology Can Revolutionise SME Budget Planning Processes Sales Forecast Sales are the foundation of your business. For an existing company, take a detailed look back over the company turnover from the past five years (or as far back as possible). By doing so, you can analyse your peak periods, seasonal sales - particularly if your business tends to turnover more at Christmas, for example - and special times within the year, to produce a forecast of future sales. This data will identify your successes and failures, enabling you to implement changes to the budget or even business. If you are a startup without previous sales to rely on, this data is readily available online. Your competitors must file their accounts at Companies House, and you can research market trends from there. If your company is new to the specific industry, it may be worthwhile paying for the services of a data research company for an in-depth industry analysis. It’s important to gain a strong understanding of your market and, particularly, audience. Without this necessary data, you are walking in the dark. The likes of Plimsoll, for example, provide valuable knowledge in the field and create a basis for your company budget and projection of sales. Data Quality Businesses rely heavily on data and data quality is hugely significant to successful budgeting. You need to ensure you collect high-quality data for the most accurate results. Redundant data, or data duplication, can cost your corporation time, money and energy to rectify. In turn, this will affect your budgeting and skew the results. Untimely data is also another issue and refers to data that is not in sync with the times and trends of your market. When industry data is not at its highest level, your business will suffer, and you must look for reputable companies to collate market information. Expenses It goes without saying, but many businesses fail to include all expenses in their budget. It’s easy to forget one-off annual payments, such as IT purchases or licensing, but they must be featured. All financial information possible is needed for a detailed budget plan. If you are a startup business, you should research the costs of starting, as well as your competitors and, subsequently, their online accounts. Industry standards can also be used as a guide to help with the creation of a budget plan. For extra guidance, a specialist accountant in your industry or even business mentor can provide invaluable knowledge for cutting costs and budgeting - especially for startups. While the services may cost, initially, they are invaluable to the long-term success of your corporation. Peer Groups Connecting with the right peer groups can help you reach your business goals and plan for your budget. A large tip for company directors is to stay active within your business peer groups to collect vital information on sales trends and any market changes