Management accounts introduction

Some companies only have sight of their financial results when their annual statutory accounts are prepared. The problem with this is that the statutory accounts are often prepared many months after the year end so the information is out of date when it is received. A detailed profit and loss account is prepared as part […]

A few points about completing your annual budget

Having prepared your budget there are a couple of things you will need to do to finish it off properly. The first is always document all your assumptions used to prepare the figures no matter how trivial they are. This means showing items such as VAT rates, PAYE/NIC rates, debtor collection days, creditors payment days, […]

Creating your cash flow forecast from your budget balance sheet

So far in my blogs I have talked about preparing your budget profit and loss account and balance sheet and I have mentioned the cash flow forecast occasionally. This blog is all about preparing your cash flow forecast. As the budget balance sheet contains a lot of information the structure of the cash flow forecast […]

Fixed assets, depreciation, capital expenditure and your cash flow forecast

All businesses have fixed assets. They are defined as items which are not for resale and have an economic life which is greater than one year. Fixed assets are allocated to categories such as: office equipment, furniture fixtures and fittings, computers, motor vehicles, leasehold improvements, freehold land and buildings, etc. Each of these categories is […]

Treatment of salary costs in your budget balance sheet

So far when it comes to constructing the balance sheet for your budget I have showed how to include stock, trade debtors and trade creditors. These were calculated using the sales, cost of sales and expenses in the profit and loss account. One of the items included in the expenditure section of the profit and […]

What expenditure needs to be included in my annual budget?

Previously I talked about how to determine your sales and cost of sales figures for your annual budget and calculate your gross profit. However in order to complete the profit and loss account and calculate the profit or loss for the business for the year you must include all your expenditure for the coming year. […]

Setting your sales budget for your annual budget

One of the most time consuming and important parts of the budget will be the sales budget. The sales budget sets a target for the coming year for the sales people and it will help determine the expenditure and cash flow in the budget. With a start up business you will need to look at […]

What is a budget and do I need one?

Most businesses dread the time when people start to mention the words “annual budget”. It means having to think about the next financial year when you have not even completed the one you are currently working in. Annual budgets are usually started three to four months prior to the year end and can take quite […]