Resources, like time and money, are a major part of any business. That’s why managing them can be a very challenging task! Its impact on the business depends on how effectively you can manage your resources. There are many different ways this can be done, but it can be difficult to determine where to start or what the most impactful steps are for your organization. For starters, here are five ways you can efficiently manage your budget.
1. Play it safe
Imagine you run into an issue that requires an immediate fix, but the allocated budget doesn’t allow you to fix it! This kind of issue will be challenging for you and your team to work with. That’s why it’s always beneficial to be conservative and to have a cushion for the unknown or unexpected events. Consider rounding up or having a separate line item in your budget for risks and contingencies. Economic downturns are inevitable, so being better prepared for factors out of your control will help you in the long run.
2. Keep an eye out
Tracking your budget to ensure everything is running smoothly should be an ongoing process rather than a year-end review. This will help you to stay on top of everything and identify problems before they turn into bigger issues. You don’t want to wait until the end of the year to solve problems that grow to be more complicated as time goes on! If some line items are at risk of going over your budget, while other line items are below budget, consider borrowing from those line items to maintain your budget goal and avoid going over.
3. Be aware of financial relationships
Be cautious that some of your line items may be tied to another! For example, let’s say your company is going to hire more employees. There are several items that you’ll need to deal with when you do so, such as enrolling employee benefits, payroll taxes, and other costs associated with an employee. It’s important to be mindful that some items may be related to others and to know when to make adjustments as needed.
4. Utilize the right tools
It can be ineffective and very time-consuming to manually calculate and budget your time and money. Even more so, we’re human – we’re prone to human errors and that’s not what you want when managing such important resources. A proper accounting or payroll solution will automate the process and reduce redundant tasks. You will save immeasurable time and headaches during the whole process, from data input to properly calculating the numbers. You’ll be able to efficiently manage your budget!
5. Evaluate vendors and subscriptions
Re-evaluate the vendors you work with to analyze how much you’re spending and the value it’s providing to the organization. Determine if you can cut back on unnecessary services or software, especially those that aren’t extensively used. For example, you may have a tool that is costing you thousands or more a year, but is only occasionally used or is used by very few individuals. If that’s the case, you can either cancel those services or look into getting a different subscription (if applicable) to cut down on these costs, like having only one user license and sharing it among the few individuals who use it. You can also consider reaching out to the vendors to see if you can get a discount or a grandfathered price for a period of time or for being a loyal customer. If relevant, even a partnership will reduce the price of your subscription!
Time and money are both very valuable resources in any organization. Without it, a business can’t run! Budgeting them can be a daunting task and difficult to manage, but it’s worth the effort to get it right. The above five ways will help simplify the whole process and put you on the right track to effectively manage your budget.
Check out our blog, How to Simplify Five Routine HR Tasks, to see how you can save time and money in your HR processes.
Want to save some more when running payroll? Contact us to find out how Paymate can help.