financial bookkeeping tips for contractors

Evaluating Rolling Budgets for Small Business

Deciding the best way to do your budget for the year is a process that will affect how much financial information you have at your fingertips. Many companies are beginning to set up rolling budgets to give them a better forecast of the year ahead. Here is the how and why to set up a rolling budget for your small business. 

What Is a Rolling Budget, Anyway?

A rolling budget is a budget that is calculated to always include the upcoming year. For instance, you might start the year with a budget that includes January through December of the current year. Once January passes, you would then redo the budget to go from February of the current year through January of the following year, and so on. The rolling budget always includes an up to date picture of what the next twelve months look like.

Benefits of Rolling Budgets for Small Business

Rolling budgets allow you to make your decisions for the next year based on more comprehensive information. It is more detailed than a regular budget. For example, if you are doing better or worse than expected for the current year, it gives you 12 opportunities to update your budget rather than just one per year. When you're operating a small business, your sales and costs can fluctuate greatly; rolling budgets give you the opportunity to go with the flow and reassess your financial standings more often.

Drawbacks of Rolling Budgets

Of course, there can be some drawbacks to using a rolling budget. If you're used to looking at a regular budget, it can be confusing at first. It requires you to continually plan out one year from now, when you may be more used to focusing on the fiscal year at hand. This can demand more resources from you and your financial staff, so it's a decision to consider before plunging in.

How to Set Up a Rolling Budget

You can make the process of setting up your rolling budgets easier by hiring a small business accounting firm to handle the process; they may be able to operate your rolling budgets on a semi-automatic process by looking at your financial statements each month and forecasting how the business will be doing in the year to come. Rolling budgets do require a bit more calculation than a standard budget, so it's important to have a qualified accountant handle the task.

About Me

financial bookkeeping tips for contractors

As a renovation contractor, I have a lot of things to worry about each day. I have to think about my customers, my business, the insurance I need and even the employees that I have working for me. All of these things keep me busy enough without having to worry about keeping up with my financial bookkeeping each day. How do you keep up with the financial bookkeeping so that you don't make any errors that could cost you a whole lot of money? I have worked with my accountant to develop a process that has helped me and I have shared the tips he has taught me right here on my blog to help you.

Latest Posts

The Importance of Accounting for Restaurants
28 May 2024

Running a successful restaurant involves more than

A Guide to Business Tax Preparation
9 February 2024

The tax season is a stressful time of the year for

Unlocking the Power of Online Virtual Bookkeeping: A Game-Changing Solution for Modern Businesses
26 October 2023

In the dynamic world of finance and accounting, on

Accountants Can Catch Errors Accounting Software Cannot
11 August 2023

Business accounting becomes much easier when you u

3 Things To Know About Virtual Bookkeeping Solutions
13 June 2023

If you are struggling with bookkeeping, there are