Common Accounting Mistakes: Part 2

Failing to use a budget: If you don't have a budget, then you should start creating one today. I'm not trying to be cliche, but if you fail to plan then you plan to fail. Leaders have said for a long time that businesses do better when there's a plan for the money. Can you get by without a budget? Sure, you can also continue to not change the oil in your vehicle and hope that nothing goes wrong... Regardless, if you know where the money needs to go and have that "written" down, then there's less of chance of something being left off, out, or forgotten. If for no other reason, there's a simple fact that "writing" something down tends to make a person/company much more likely to remember, stay on track, and follow through.

Why is this important?

  • Forecasting
  • Planning for emergencies
  • Helps to keep you from spending money that isn't there
  • It brings insights into spending habits
  • and possibly a little peace of mind

What to remember: Having a budget is extremely important, but don't spend too much time on it, get help and advice where needed, and keep it practical so that you'll actually use it.