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Boost your Budgeting Skills

Writer's picture: hellocashflowhellocashflow

Updated: Sep 18, 2024


1. Stay Flexible!


Recognise that business conditions can change quickly, so staying flexible is crucial. While your Hello Cashflow Budget serves as a guide, adapting it to evolving circumstances is a smart move.


However, any changes to the Budget should be made thoughtfully and based on careful analysis to ensure your changes align with your financial goals and objectives. Before changing your Hello Cashflow Budget, we recommend using our Scenario Calculator to input various numbers and see how they might affect your cash flow. Once you're confident in your predictions, you can adjust your Budget to reflect a more realistic target.


Timing of these changes is an important consideration too. For example, if a significant unexpected breakdown of your equipment occurs or a new opportunity arises, you may want to adapt your budget accordingly for the remainder of the financial year. However, if you are considering a change in your business strategy, it might be more appropriate to reflect the impact of those changes in the next year’s Budget.


2. Build a Buffer


The number one mistake to avoid is not maintaining a buffer to cover unexpected expenses, emergencies or temporary cash flow shortages. Making sure you have a safety net during challenging times is another smart move!


Suggested strategies include:


  • Establish an emergency fund by setting aside a portion of profits regularly into an emergency fund specifically designated to cover unexpected expenses. 

  • Open separate bank accounts for different purposes, such a Sales Tax/GST Savings account to ensure that irregular spending is not mixed up with day-to-day operating expenses.

  • Automate savings by setting up automatic payments to funnel a portion of your revenue into the emergency fund each month. Automating savings makes it easier to consistently contribute to the buffer without manual intervention.


These budgeting strategies will give you confidence to meet your ongoing business and personal financial commitments with less stress.


3. Try a fresh approach


You may have heard people throw around different approaches to budgeting. Here are some ideas that you might like to consider:


  • Zero-based approach: This method starts with a clean slate every budgeting period. Every dollar of income is allocated to specific expenses, investments, or savings, ensuring nothing is left unplanned and leaving you with a zero balance at the end. It's an effective way to strategically and efficiently manage your finances and can help you get the most out of every dollar.

  • Incremental budgeting approach: This method is great for businesses with stable or predictable operations. It uses last year’s budget as a starting point and makes small adjustments for the new period. It's less time-consuming and helps maintain consistency while making small improvements over time.

  • Activity-based budgeting: This approach helps you align your budget with your business activities and priorities. By targeting your budget to specific operational goals, you can achieve more strategic financial outcomes and make sure your resources are used effectively.

  • Rolling budget approach: Ideal for rapidly changing environments, this method involves regularly updating your budget to reflect the latest information. With continuous monitoring and adjustments, you can stay flexible and responsive to new challenges and opportunities.


By exploring different budgeting approaches, building a financial buffer, and staying flexible, you're already on the path to financial stability and growth. Now, take it a step with Hello Cashflow’s Budget Editor to easily manage your budget.





Make budgeting effortless and effective with Hello Cashflow's

intuitive budgeting tools that adjust as your business grows.



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