Controlling a budget - checklist


Controlling a budget - checklistStaying on top of your finances is vital if you want your business to succeed. Read our handy hints on controlling your budget.

  • Make sure the budget you have prepared includes all the key indicators you wish to control.
  • Give responsibility for budget items only to individuals with the authority to control the outcome.
  • Schedule regular reviews of budget performance.
  • Review budgeted figures to identify cash flow or other problems which can be anticipated and tackled in advance.
  • Compare margins, working capital and other key ratios with historical figures to identify how performance is expected to improve or deteriorate.
  • Carry out a sensitivity analysis to see what effect different outcomes could have on performance.
  • Focus on controlling items which could have a significant effect on overall business performance.
  • As figures become available, compare actual sales to budget and identify reasons for this sales variance.
  • Determine how fixed costs differed from budget and whether any changes are likely to be permanent.
  • Analyse the extent to which variances in variable costs reflect sales variances, or whether prices or efficiency have changed.
  • Identify to what extent variances in income or expenditure reflect differences in timing rather than performance.
  • Take action to sort out underperformance which can be controlled.
  • Capitalise on unexpected favourable changes.
  • Revise future budgets in the light of the information you now have.