Budgeting Monthly Business Expenses With a FinTech App
At 52, I am more than willing to admit something that I did not when I was in my 20s, 30s, or most of my 40s. Adulting is tough.
Budgeting and following a budget comprises a huge part of adulthood. While we regularly discuss personal budgeting advice, today's topic centers on business budgets.
In business, financial planning makes or breaks your company. What I learned while learning to adult was that using planning tools and putting in the effort to create and follow a budget makes everything much easier.
It may not seem that way when you start financial planning. The initial activity requires a bit of work.
The App Cannot Do It For You
Unlike the tracking apps used for personal budgets, the apps for business budgets help you organize your information. Their utility comes from helping you identify the information you will need and organize it in the appropriate way so, financial lending institutions and insurance companies will willingly provide you with the financial products you need to make your business a success. Once you grow beyond bank loans, you need an angel investor or venture capital funding.
So, what apps help you with this wonderful discovery of financial information needed for making your business budget?
Apps To Organize Monthly Business Expenses
According to US News and World Report, seven apps top the list of software to help you organize your business budget. While you probably will not use all of them, you should familiarize yourself with the basic resources provided by each. Their list includes things like Trello which focuses more on communication tied to task management. For that reason, I am including a few of my own suggestions that scale well so, you can continue to use them as your business grows.
Workday Adaptive Planning
The cloud app Workday leads you through the process of building accurate business budget planning models. If you just said, “Huh?” then you probably need to take a quick business course over at edX.org on business finance before you start your entrepreneurial venture. You need to understand business planning, financial forecasting, and budgeting.
This app helps you do those activities, but you will need an understanding of what they mean and how they relate to your business before you undertake the budgeting process. This cloud option scales from when you start your solopreneurship up to businesses of more than 10,000 employees. Using the Workday product, you can continue to use the same tool throughout the life of your business.
OnPlan
Similar to Workday, OnPlan also creates budgets, budget forecasts, and lets you generate necessary financial reports. This app uses a collaborative approach that lets you involve other members of the startup team or key employees. It provides integration capabilities with numerous other software packages and boosts productivity with “best-practices templates.”
OnPlan integrates with Microsoft Excel and Google Sheets so, you can do most of the work of financial modeling in a familiar spreadsheet environment. The main area that OnPlan helps with that others do not is risk modeling. It provides a financial modeling section based on “what if” scenarios so, you can plan best and worse case scenarios. Its budget vs. actual expenses tool makes it simple to see how well you follow your business’ budget. The app also helps you track business performance and provides a sales and marketing component that can prove invaluable for small startups, especially. Sign up for a free demo of this offering from Gartner Digital Markets.
Jirav
Ignore the funny name to American ears. Jirav gets rave reviews from those who use it. Five stars out of five stars from people who regularly do budget forecasting and planning should tell you that it works. You can try it for free for two weeks. That trial period lets you learn it and plan your initial budgets.
Thereafter, it costs $250 per month. That may seem steep, but if you start a business with employees, you probably obtained funding through a bank or venture group. This program provides customizable templates for every financial report and graphic you need, making your management reports, cash flow statements, balance sheets, etc. look as if you have your own army of certified public accountants wiling away hours on them. It integrates with a bevy of programs from Xero to Sage Intacct to Gusto to Oracle Netsuite. If you happen to think in really old-school terms, yes, it integrates with Microsoft Excel and QuickBooks.
QuickBooks
This software seems to have existed since the dawn of time, but really, it was the 1980s. In those days, you had to purchase it off of the shelf, but your license lasted forever.
Today, you purchase a monthly subscription plan. The costs start at $25 per month. You track cash flow and make payments. You can send electronic invoices and collect payments using the app.
Budget
SAP Concur’s offering, Budget, provides one spot for tracking travel, expenses, and invoices. While it tracks in real-time, it does not provide you with a means for brainstorming your initial budget. You can try it out using a free trial of SAP Concur provides.
Wrapping It All Up In a Nice Bow
While these apps cannot do the work for you as personal budget apps can, they can make running a business immeasurably simpler. Each of the three financial planning apps — Workday, OnPlan, and Jirav — lets you determine your initial monthly business expenses to plan your budget for your business plan. They also help you generate the reports you need each month to track your business growth. The latter two apps, QuickBooks and Budget, help you track expenses, invoices, and payments so, you can run your business effectively and monitor cash flow.
Planning for Monthly Business Expenses
Okay, you awesome new business owner, you need to learn how to budget for a business. You know the method you used to come up with your personal budget? That won’t work when it comes to a business. You have to conduct research and know all the expenses in advance. You cannot wing it.
With a personal budget, you get to use a tracking app and learn your spending quirks. You have that opportunity to ease into it. As long as you pay your rent and essential utilities, you can tweak your personal budget as you go.
Your business plan must include your budget. You must have a business plan to obtain a bank loan and commercial insurance. Depending on the state in which you live, the state mandates that you carry certain types of business insurance. For example, you must carry workers’ compensation insurance in nearly every state so long as you hire employees. Every state except for New Hampshire and Virginia also requires you to obtain a commercial auto insurance policy if you use the vehicle for business purposes. Each state differs in the percentage of time ratio for a vehicle used for both personal and business purposes. Since you must obtain insurance, you must have a business plan. The business plan must be complete so, you have to include a budget.
Visualize Your Budget. Budgetry Can Help You Do That.
Running a Business
Personal budgets are one thing, but when you get into founding and running a business or two, you must plan out the monthly business expenses in advance. You need to have everything organized. You count on your vendors to provide raw materials for your products, but they count on you for timely payment.
One of the simplest ways to effectively budget for your company you can pull from your personal budgeting activities. You use a budget planner app to build and manage your business budget.
It sounds so simple when you read it that way. You just get an app and use it.
Well, it does get a bit more complicated than that.
The complexities of running a business require an extreme amount of organization and scheduling. You must meet all deadlines. You interface with the public when needed. You create the business plan and marketing plan. Your job also includes growing the business. Because of inflation and increases in the cost of living, you cannot simply maintain a set number of projects or clients to make a static amount of money. You have to, as my dad loved to put it, “beat the bushes” for new customers.
Your business must grow
Stagnation as a person or a business is simply a bad thing.
Growing your business requires an investment of time and money. You must advertise. You blog. You speak at the Chamber of Commerce, community groups, schools, etc. to educate the community on your business and how it affects their lives. You show people how it solves a problem for them.
All of that together means you must have the budget allocations to allow the activities that grow your business. Those budget allocations include money for business cards, newspaper ads, ads in the local schools’ athletic programs and yearbooks, and signage for your business if you have a retail location.
Some of those items qualify as monthly business expenses while others prove occasional or one-time. (You probably only have to purchase one sign for your retail business unless the building experiences a fire or tornado.) You also have to cover all the monthly expenses of the business though also known as your overhead. That term refers to the electricity, gas, water, trash service, coffee service, etc. It also includes the office supplies you purchase regularly, such as post-it notes, steno pads, pens, pencils, printer paper, etc.
Final Thoughts
Getting started proves much easier if you know what to expect, the types of monthly business expenses you will have, and you have a firm grasp of planning and running a business. You can start learning these things today by using the Goalry branded sites. Nab a member key, our fancy term for a password, and start learning the ins and outs of business finance and financial management today at Budgetry. When you feel ready to obtain funding for your business, explore Loanry. At tax time, turn to Taxry for valuable information on properly filing your Internal Revenue Service paperwork. Running a business takes time, effort, planning, and money. Manage your money more wisely. Start learning how to plan and budget for your business today at Goalry.