The Three Most Common Budgeting Errors - Engine Builder Magazine

The Three Most Common Budgeting Errors

Not Setting Goals. It’s almost impossible to set
spending priorities without clear goals for the coming year. It’s
important to identify, in detail, your business and financial goals and
what you want or need to achieve in your business.

Underestimating Costs. Every business has ancillary or
incidental costs that don’t always make it into the budget – for
whatever reason. A good example of this is buying a new piece of
equipment or software. While you probably accounted for the cost of the
equipment in your budget, you might not have remembered to budget time
and money needed to train staff or for equipment maintenance.

Failing to Adjust Your Budget. Don’t be afraid to
update your forecasted expenditures whenever new circumstances affect
your business. Several times a year you should set aside time to
compare budget estimates against the amount you actually spent, and
then adjust your budget accordingly.

Richard L. Lipton CPA & Associates LLC, located in Florham
Park, N.J., draws on its founder’s 10 years as a stockholder and
manager of family-owned automotive service business in Paterson, NJ. E-mail him at [email protected] or visit his website at www.liptoncpa.com.

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