Business Expenses and Company Budget
One of the most important aspects of any business is creating a proper budget. This budget will include all the primary business expenses that you need to pay off per year. And believe me, creating a company budget is not at all an easy task. Most of the businesses use cash flow planner for preparing their budget. In general, such planners consider the cash that you will be spending for your business purposes for 13 weeks at a time. Some of the cash flow planners also consider one quarter at a time. In this article, we will discuss some of the business expenses that you need to consider while preparing your budget through a cash flow planner.
The first expense you have to consider is your employees’ salary. This is one of the most significant business expenses and must be paid off on time. So calculate the total amount of salary that you need to pay each week/ month. Also consider the amount that you need to pay out to the part time or freelance workers. In addition, you must calculate the other employee benefits. This cost is usually a huge business expense. However, some of the service providers offer group discounts on monthly premiums. Search around if you can avail such discounts.
In most of the cases, the company needs to provide some training and certification courses for upgrading their employees. The cost of such training and courses are to be paid by the company. Thereby, you must include the cost of such business expenses while preparing company budget.
One of the most important business expenses involves the travel and entertainment expenses. You will have to pay the business travel related expenses including hotel accommodation costs, car rentals and airfares, meals and other costs incurred with business trips. In addition, consider the amount that you need to pay for annual party and other events. Business luncheons and dinner parties will also come under this category.
While preparing budget or calculating spend strategies most of the people forget to include their retirement plan. This expense will be pain by the company; thereby make sure you include your retirement policy within the company’s expense management system. Payroll taxes are also to be considered as a major business expense. However, to calculate this you need to seek advice from your accountant. This cost usually varies depending on your total profit.
Your business dues and subscriptions too should be included within your business spend. In general, you need to pay them either yearly or quarterly. Apart from these, you must also calculate that amount that you need to spend for purchasing products for internal use, your marketing and promotion costs, loan repayments (if any), corporate income taxes and other professional services.
You need to understand that business expenses are regular activities and there can be a sudden increase or decrease in the flow, affecting your company budget. However, keeping a track on the budgeted business expenses is important. You can either use a cash flow planner or a spreadsheet for this purpose. Some may even opt for the web-based business expense management software to calculate your business expenses.