Wrong! This is a perfect time and I’ll explain why. Most of us have a streak of procrastination in us (I admit it) and so we are just now finishing up our record keeping to file our taxes for last year. While you are in the bookkeeping mode, use that to go that one step further to create a budget for this year.
If you are a little queasy about doing a budget, don’t worry, that’s normal. First, a budget is nothing more than a projection of future income and expenses. It doesn’t have to be complicated and it certainly doesn’t have to be perfect.
First Time Budget Creation
Don’t let this scare you! This isn’t a document that can’t be adjusted. If this is your first attempt at a budget, use what is available for you. If you had income and expenses last year, use that information to populate your budget for this year. And since we’re into this year already, use your actual numbers for the past months to fill in the first few columns.
Here’s a simple form that a boarding facility would use:
Of course, I haven’t added everything because each business is different. You would add the income and expenses that would fit your particular business and customize the form.
If you are using QuickBooks or other financial software, you can create the budget right in your file. If you don’t, a simple Excel spreadsheet would also work. Your Net Profit/Loss line is: Total Income – Total Expense = Net Profit/Loss. If your income is more than your expenses, you’ll have net income. If your expenses are more than your income, you’ll have a net loss.
Updating Last Year’s Budget
If you had a budget last year, but haven’t had time to update for this year…no problem! Again, if you are using QuickBooks, you can generate a new budget in a matter of minutes. Go to Company -> Planning & Budgeting -> Set Up Budgets and follow the steps to create a budget for 2016. If you tell QB’s to use the figures from last year, it will populate the entire budget for 2016 using the actual figures from 2015. You can then make adjustments as needed, and your budget will be ready!
And here’s the best part of doing a budget. You can see on paper where you might have problems and can address them before they happen! Let’s say you fill out your budget, and notice that you don’t have a profit in July. Maybe you decide to add a summer camp, or you have a clinic and invite an outside trainer. You would need to work the numbers to see if this could help, but at least you would not be in a panic mode and have time to address the issue.
So today is a perfect day to create a budget. And so is tomorrow. In reality, there is no bad day to create a budget. Go ahead and do it! If you need help, Feel free to contact me:
Farm & Equine Business Services, LLC
Editor's Note: Pam Saul is the founder of Farm & Equine Business Services, and uses her 30+ years of experience with her family’s Rolling Acres Farm to help in new business bookkeeping setup, business plans, and customized QuickBooks, for the unique needs of the equestrian and agricultural business owners.
Pam has been involved in the agricultural industry for many years and serves on several boards and organizations including as Treasurer for the Montgomery County Soil Conservation District and MARBIDCO.
Pam is also a member of the American Institute of Professional Bookkeepers (AIPB) and a Certified QuickBooks Pro Advisor.
These positions give Pam a unique perspective on the pulse of current agricultural and equine business trends and services in the industry. Along with her expertise in small business accounting, Pam is an excellent resource to help business owners build a better business foundation for their unique business.