It’s not enough to just set a budget for the year and forget about it. You must regularly review your budget and forecast and track your actual results against them. This should be done at least monthly.
If you don’t monitor your actual results compared to your budgets and forecasts, you won’t know if you’re on the right track. You need to really understand what your financial reports are telling you. If you’re not currently creating a management report each month, it’s something you should consider.
I’ve just shown you how, even with an increase in sales and profit, you can still go broke.
Make sure you get help with this because understanding your cashflow is essential to ensuring your business is successful.
