Long-term budgeting is a funny thing, in that you might end up doing quite a lot of guessing. This strategy leaves you less agile and open to change, as you follow a plan that may no longer make sense for your business. Instead, the fast-moving world we live in now requires a more flexible approach to budgeting. Real-Time Budgeting gives you that flexibility, and it’s easier than you might think. It’s especially important to look into this strategy now, before we enter the new financial year.
How does real-time budgeting differ from traditional budgeting?
We are fast approaching the financial new year when most businesses are gearing up to make their annual budget. Their success is then measured against that budget until the end of the financial year. This means that not only is your money locked into a plan for a whole year, but your objectives and outcomes are also set for the year.
When business owners look back on the last few years, the need to be agile should become pretty clear. Anticipating your needs, or the future state of the market is impossible. Long-term planning is sometimes just guessing, and there is a smarter way to operate more flexibly.
Real-time budgeting changes the planning end of budgeting, but the reporting and tracking side will stay the same. Businesses still have a bird’s-eye view of spending and resources, allowing them to make to-the-moment decisions on their goals and next steps.
Real-time budgeting is not a replacement for long-term planning. Having clear priorities and goals is still critical for a business’s ongoing success. So long as you aren’t so tied to your plans that you lack the ability to see outside of those plans and adapt when you have to.
How to make real-time budgeting work for your business
Real-time budgeting works best when key decision-makers have access to the most up-to-date and accurate information. If you don’t already have something in place, it’s a good idea to invest in quality accounting software with viewing tools that make understanding your financial state of play easy. This is something the team at MSI Taylor would be happy to help you do.
These viewing and reporting tools should also be able to intuitively guide you toward the spending decisions you need to make to keep your business moving forward. If you find your financial data too difficult to read and interpret, then you won’t end up making real-time choices that work for you.
Real-time budgeting allows businesses to take control of their finances in a new way, responding to opportunities and challenges more flexibly. Great communication between leaders as well as fantastic accounting and reporting tools are going to be essential to give you the power you need to move quickly with your budget. Real-time budgeting is not, however, a solely reactive approach. Having a larger plan can help steer you in the right direction, without the financial rigidness that traditional budgeting necessitates.
If you are looking for reliable Accountants Brisbane, then the team at MSI Taylor can help! We are a team of accounting and business advisors Brisbane, and we can help you set up an accounting system that works for you with real-time budgeting capabilities. Contact us on 07 3512 8888 or email@example.com