4 Reasons Why Businesses Need A Smart Budget Plan

Running a business entails a smart budget plan that factors in proper cash management and identifying income and expenses. Here's why having one is important and how you can create one.

As a business owner, you should pay a lot of attention to your budget, especially since 82% of businesses fail because of cash flow issues. Budgeting is, after all, one of the main factors that can make or break the overall operations of the brand—given that it allows you to see where your money is being allocated, along with how much is going in and out of your business.

From a local standpoint, starting a business in the Philippines entails paying for all the costs that come with this decision, including registration fees with the BIR (Bureau of Internal Revenue), SEC (Security and Exchange Commission, and DTI (Department of Trade and Industry), as well as barangay clearances and mayor’s permit, among other government-related expenses.

As for managing the business itself, factors included in your long-term budget include lease or rent, construction fees, payroll for employees, equipment, taxes, and other day-to-day expenses. All this can be quite overwhelming without a proper system, which is why finance apps like Lista PH or even digital banking apps like GCash and Unionbank can help you budget effectively and efficiently.

Whether it may be for business or personal use, these finance apps include features like an expense tracker, budgeting feature, and savings feature that you can make the most out of. That being said, here is why you need to have a smart budget plan for your business:

4 Reasons Why Businesses Need A Smart Budget Plan

Keep Track of All Expenses 

First and foremost, it is important to learn how to keep track of your expenses. This includes making a balance sheet that records your cash flow—from sales to income, expenses, debts, receivables, and more. Doing so will be easier to monitor cash flow, or simply, how much is going in and out. What's more, this will also help in tracing what consumes the most amount of money.