Budgeting is vitally important within a business to ensure planning and control, as well as to evaluate business performance.
Why is budgeting so important?
- Analysing Business Performance
The primary purpose of budgeting is to measure and analyse business performance. Comparison of actual results versus budget will highlight differences and assist in the identification of issues.
Where adverse differences could have been controlled, this review process can assist owners in addressing any problems and ensuring stricter control going forward.
- A Management Tool
A budget can be used as a means to assist you in achieving your business objectives, for example, to plan for development and expansion, savings can be identified, within the budgeting process, and set aside to achieve the planned future growth.
- Controlling Expenditure
Budgeting is key for control of expenditure within a business. Regular monitoring of actual costs against budget will ensure that key stakeholders are aware when budgets are exceeded, enabling them to regain control or adapt their finances for unavoidable changes.
Our Budgeting Service
Many businesses do not implement budgets, particularly early on in their development. As the organisation expands budgeting can form a vital part of the management reporting.
Concinnity Consultancy can assist you with implementation of the budgeting process as well as the ongoing review of targets and results.
Within this process, sensitivity analysis can be used to show the impact of certain changes to the business, for example, what would be the effect of 20% growth in sales or 10% reduction in overheads or how would an improvement in credit control efficiency and reduction in debtor days affect the business? This can be key in business planning and setting objectives for the coming years.
Management Accounting is vital to ensure that you have accurate and timely information in relation to your business. This can comprise profit and loss, balance sheet, cash flow analysis and management of debtors and creditors. Management Accounting can be linked to the budgeting process to really highlight how the business is performing in comparison to expectation.
We can design a package that is tailored to your needs and requirements, or those of other stakeholders of the business. We will ensure results are presented in a way in which you understand and will highlight key items for discussion and consideration and implement any recommendations, if required.
As many business owners get wrapped up in the day-to-day running of the business, it is difficult to find the time to analyse results and identify potential improvements or savings. Frequently there are savings that could be made.
We can analyse overheads and suggest potential reductions and improvements. We can also use sensitivity analysis to tweak results and show the impact of small changes, for example, what would be the impact of increasing prices by 1% or what effect would reducing overheads by 5% have on the profitability of the organisation?
Closely linked to budgeting, Cash Flow Planning is critical within a business. It is achieved through using assumptions related to the business and reviewing the short and long term anticipated results.
Short term Cash Flow Planning needs to be very precise and is particularly useful where you may be aware of a difficult month, delay in invoice payment or lack of an anticipated sale. It is critical for identifying 'pinch-points' and the results can help plan in order to avoid difficult scenarios, such as missing a crucial payment or breaching the overdraft in place.
Long term Cash Flow Planning is less precise and will look at forecasting into the future in order to assist with major business decisions, such as the purchase of equipment or employment of staff. It can also be used to identify where monies may be moved to achieve a more efficient rate or highlight a lending requirement with sufficient notice to secure a facility. Often a lender will require a forecast to show when the funding may be repaid and it may be used as part of the support for the request.
A valuable relationship with the business banker is often overlooked. This can be hugely important to a business whether just for ongoing support or a new lending facility.
We can work with you and your banker in order to identify and understand their requirements from your business and help put this in place, in addition to compiling any relevant information.
Services will depend on the client and their requirements from the bank and could include any number of the other services listed.
A robust finance team is key to any organisation.
We have a wide range of experience of finance team management of all levels, as well as recruitment.
This could involve managing the team as an interim solution whilst recruiting for a permanent leader and assistance with recruitment of team members. Our services also include working with demotivated team members in order to improve their job satisfaction and efficiency, encouraging them to progress within your organisation and take on more responsibility.
Often the finance function may be under-resourced or working inefficiently, without the time to step back and evaluate their processes.
Our Process Improvement service offers a range of business advantages, from time, resource and efficiency savings through to enhancing staff knowledge, motivation and efficiency. A regular review is also useful to ensure tasks are being completed properly and controls are in place to prevent business critical threats, such as fraud.
The benefit of using Concinnity Consultancy is that we can evaluate your systems from a fresh perspective, working with your team to review and analyse the existing tasks and processes, followed by a report with recommendations and potential improvements for your finance function.
We can also assist business start-ups with setting up their processes to ensure that everything is organised and compliant from the outset.
Financial input is key to the success of any business and yet it is surprising how many boards operate without a Finance Director.
We can combine any of the above services with being a Non-Executive Board Member, in order to offer financial contribution and fresh perspective based upon our knowledge and input within your business.
Tina Yarde - ACCOUNTS MANAGER, SWEET CONSTRUCT
Joanna Ellis - MANAGING PARTNER, THOMAS AND ELLIS LLP
Craig Rogerson - PRODUCTION MANAGER, SCENIC SETS LTD
Mark Summers - MANAGING DIRECTOR, AVON VALLEY PRECISION ENGINEERING LTD
Martin Crook - RELATIONSHIP DIRECTOR, BARCLAYS
Christine Tuckerman - BISHOP FLEMING
Louise Fleming - ARETAI CONSULTING
Adele Balzan - BRIGHTSIDE MARKETING
Guido Wilson - TWENTYFIFTY
T: +44 (0) 800 170 1779
M: +44 (0) 7590 403 292
We would be delighted to set up an initial consultation to assess your requirements, at no charge.
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