We reflect on the reasons why September can be a good month to start preparing the company's annual budgets.
- Seven reasons why September is a good month to get to work on company budgets.
- You must always keep in mind the usefulness of having annual budgets.
The holidays are over. The month of August is far away, in which many accountants, administration managers and financial directors will have enjoyed a few well-deserved days of rest, once all the obligations of the hectic month of july.
During the holidays, there may be those who manage to completely disconnect, but for many the year end above can still heat up their heads, something they may have tried to solve by cooling them off in the pool, in the sea or with the mountain air.
However, to prevent us from encountering unpleasant surprises at the close of next year's financial year, the creation of budgets, their monitoring, analysis and decision making to correct deviations, is a very useful tool for all those who are in charge of closing the annual accounts of the companies and presenting them to the administrators and the General Board for approval.
What are the company's annual budgets for?
It is worth remembering that in the budget Both the operations to be carried out and the resources to be used are planned., its purpose being the achievement in the specified period of the objectives defined by the company's management, quantified in monetary terms.
But the most important thing about a budget is that it is not a list of data that is accumulated in an accounting program or in a spreadsheet without any foundation, since we may want to duplicate the company's billing without taking into account that its structure may not support that growth.
The first phase of the budget is reflection, so that You have to start by defining what you want to achieve in the period of definition thereof., both at the level of sales and results, and then begin to quantify the resources necessary to achieve the objectives.
The budgets of a company will allow us to detect, among other things, if sales forecasts are met, if the structural expenses are supported by them, if the financial costs eat into the profits or, going down into more detail, if a seller is or not profitable for the organization.
In addition to financial accounting, for the preparation and monitoring of budgets, analytical accounting can be used, with which we can reach a level of detail and analysis that financial accounting does not reach.
Seven reasons to start budgets in September
There are times for everything, in life and in accounting, too. In relation to accounting, there are two key periods: the annual accounting closing, which occurs largely in January, and the presentation of the annual accounts and Corporation Tax, which occurs in the month of July.
September can be a good month for preparing annual budgets for the following reasons:
The countdown begins for the closing of the accounting year
From January to July, obligations from the previous year are still maintained. August is a month in which those responsible for accounting usually take vacations and, once September begins, the countdown to the closing of the accounting year begins.
Have more time
The preparation of the budgets should be completed before the end of November, so that the month of December can be used for their review and presentation to the parties involved in their compliance.
Sufficient data
The basis of a budget must be based on accounting that reflects the true image of the company, since the historical data recorded in the accounting will be the basis and starting point for preparing the budget. Entering September, we already have data for more than half of the current year and the accounting closing of the previous year, which can serve as a sufficient basis for preparing budgets.
Anticipate periods of increased workload
Once September is over, there will only be three months left to complete the accounting closing period, with December and January having more workload than other months, due to tax obligations and year-end accounting adjustments.
A clear mind and charged batteries
Budgets require reflection and work. When you return from vacation with a clear mind and rested body, it can be a good time to tackle a task that will require a lot of energy and concentration.
Everyone in the office
The preparation of budgets requires the collaboration of different departments and managers from different areas, so it is advisable that all the participants in their drafting be in the office and the necessary data be requested with sufficient advance notice.
You can collect reflections and ideas from the vacation period
Many workers disconnect completely during the holidays, but there are many managers who take the opportunity to reflect on the beach, about new objectives for returning from vacation.
Fountain: SAGE
