Creating a budget is no fun. It’s even worse if you’ve never actually created a budget before and this is your first time. It’s a bit intimidating.

Traditionally, a budget is created for an entire year at a time, with amounts shown for each month of the year. For any first-timers, here’s how you can get started today.

START WITH THE BASICS

This step should be relatively easy because they are typically about the same amount each month and occur on a regular basis. I.e.: rent, utilities, debt payments, payroll and insurance to start with. Now add your income. Don’t forget to add your net monthly income. Once this is added take your net income and subtract the total from the line items you jotted down in the basics and hopefully you end up with a positive number.

DIGGING A LITTLE DEEPER

With the basic expenses out of the way, now start listing your operating costs. Categories such as cost of goods sold, supplies, marketing, and administrative to name a few.

One suggestion is to get yourself a credit card for business purchases only. Purchasing your business transactions on a card is a lot easier to track than paying by cash or check.

TRACKING

Regardless which method you use, cash, check or charge, it’s important to be as detailed as possible to get a clear understanding of how you are spending your money. Tracking your income and expenses with business accounting software such as QuickBooks makes tracking, reporting and planning easier.

Remember, it’s important to remain agile and make changes to your budget as needed. Having a business budget in place enables you to plan ahead. It enables you to make educated decisions to enhance your business operations with added clarity and efficiency.

Consider these tips to help the budgeting process:

• Adjust accordingly. During these tough economic times, entrepreneurs may be seeking ways to trim expenditures to increase cash flow. If your business expenses need to be reduced, determine which items are nonessential to your business and cut those items.
• Consult a professional. Consider consulting a trusted CPA, financial advisor or banker to help you create a budget. A trusted professional can help get you started on a budgeting system that will work best for your individual needs.