Stage 2 Financials To ensure the business is “on track” it is very important that financial results are regularly compared with budgets. You should prepare at the very least 2 kinds of budget: The income and expenditure budget This enables you to compare your budgeted figures with actuals. Any noticeable variances must be investigated so corrective action can be taken, if appropriate. Programs such as MYOB have the facility for budget analysis. The cash flow budget This is particularly helpful for start up situations when cash management is so important. Raine & Horne has prepared an Excel spreadsheet to simplify preparation of this budget. This budget will highlight periods when pressure on cash flow is high. This will enable you to ensure adequate funds will be available when needed most. It can save the embarrassment of asking your bank manager for assistance at the last moment. Finally, you must appreciate that business planning is not a one off exercise. The plan must be reviewed regularly (every 3 or 6 months) and updated if appropriate. This worksheet is intended as a guide only. You may wish to add sections, expand existing sections or trim the data. The important thing is to start now! Notes… 136 | Annexure | 136
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