Common Budgeting Mistakes and How to Avoid Them

 


Visitors: 336

Great business ideas and bold marketing plans are useless if you do not budget carefully. In this article we explore some of the most common budgeting mistakes and how you can avoid them.

Do not count taxable amounts as company holdings

It is easy to forget that the balance in the company’s bank account does not represent the true holding value of the company. Remember that if you exceed the VAT threshold, a certain amount will be owed as VAT each quarter and that you will have to pay corporation tax at the end of the company’s financial year. By counting the entire amount of what is in the bank account as holdings, you risk making purchases that the business cannot afford.

Do not ignore your cash flow situation

Cash flow problems are caused by a time lag between when you pay your suppliers and when you receive money from your customers, and they are at the root of many companies’ failures. Try and manage your cash flow by chasing up late payments and not spending money that you have not yet received. Do not over promise and under deliver

It is often the case that you can generate repeat business from existing customers and that it is easier to do this than to hunt for completely new business. By over promising and under delivering you risk disappointing your customers and losing any future business that they may have put your way. It is far better to under promise and over deliver so that you exceed their expectations.

Do not mismanage your advertising finances

When building the cost of advertising into your business accounts be careful not to show these costs as a percentage of sales in the same period. Bear in mind that advertising normally takes a certain amount of time before it yields sales. Make sure that you have accumulated an advertising budget before you commit any money and that you have built projected returns properly into your accounts.

On Stop‘s Improving and Managing Cashflow Programme is designed to accelerate payment and alert members to customers with bad payment histories.

(382)

Article Source:


 
Rate this Article:  0.0/5(0 Ratings)

Related Articles:

Avoid Costly Budgeting Mistakes

by: Tom Palange (April 12, 2007) 
(Finance)

Avoid Common Bodybuilding|Weightlifting Injuries-Common Mistakes In Gym

by: Matt Wiggins (October 18, 2010) 
(Health and Fitness/Build Muscle)

Common Investing Mistakes and How to Avoid Them

by: Sarah Freeland (February 08, 2007) 
(Finance)

Fundraising: How To Avoid Three Common Mistakes

by: Judith Rothbaum (December 16, 2004) 
(Business/Marketing)

The Most Common Affiliate Mistakes to Avoid

by: Nikolai Ivanov (July 06, 2008) 
(Internet and Businesses Online/Affiliate Revenue)

How to Get Your Ex Back 3 Common Mistakes to Avoid

by: Elizabeth McAdams (July 28, 2008) 
(Relationships/Conflict)

How to Avoid the 3 Most Common Affiliate Mistakes

by: Abbey McGuire (August 06, 2007) 
(Internet and Businesses Online)

Avoid the Most Common Mistakes of an Interview

by: Carl Yorke (March 07, 2008) 
(Business/Careers Employment)

Avoid Common Affiliate Mistakes

by: Jennifer Meinert (June 19, 2008) 
(Internet and Businesses Online/Affiliate Revenue)

Avoid These Common Gardening Mistakes

by: Danna Schneider (April 20, 2008) 
(Home and Family/Gardening)