by: Captain America
Introducing a new series of blog posts from the Super Heroes on the LMN Support Team.
It’s the start of a new season and soon (if not already) the busy season will have started and things like a budget will hit the back burner. But it’s important to remember that without having the proper metrics in place it would be very hard to determine how your business is performing come year end. So to take out the guess work, setting up a budget that you can quickly access is very important. This way you know where your money is going and you can compare year to year how your business is doing.
Avoid the guesswork by using LMN to tie your budget to everyday work practices!
The first thing you want to do is start with inputting your numbers in LMN’s budgeting section. You can pull your numbers from QuickBooks with a Profit and Loss report or get in touch with your accountant/bookkeeper who will be able to provide this type of information. Other great reports you could look at include your: Balance Sheet; Balance Sheet Previous Year Comparison and a Statement of Cash Flow. Comparing your numbers to previous years will give you valuable information when forecasting for the upcoming year.
These reports should give you all the information you need to start inputting your numbers into LMN so let’s get started!
Quick tips when inputting your numbers…
A lot of people ask if they should be putting an item in their equipment/labor section of their budget or if it belongs in their overhead? An easy way to determine where an item should go is to think if it is billable to your customer or not. For instance, you might have a supervisor riding around in the field. Technically that supervisor is in the field but you would not be charging your customer for this. Therefore, the supervisor would be an overhead wage and not a field labor wage.
If you’re an owner that works in the field but also does office work what should you do? This ties back to the previous tip. Try to estimate how many hours of the owner’s time would get estimated to your clients. This amount can get put in your field labor section and the rest of the salary or wage can be split into your overhead account.
The last tip for overhead inputting is to be specific. Try to avoid lumping overhead expenses together under general names. By doing this you will have a clear understanding of where your costs are coming from in case you need to use that information for any future business decisions such as cutting costs.
Check back for Part 2 of Building A Successful Budget: Reading into your numbers and how to increase your profit!
Need help setting up your budget? Contact Captain America at support@golmn.com or call 1-888-347-9864.
