Blog Layout

Business owners: Avoid these 4 common business budgeting mistakes that could cost you

Budgeting in your business is essential since it helps you understand how you’re spending your money.

As tax accountants practicing in the Cannington area of Perth, we’ve noticed the same budgeting mistakes coming up again and again with clients. These are effectively eating into profits and increasing costs for these businesses.

So we thought it could really make a difference to pass on the four most common business budgeting mistakes for you to avoid…

The most common business budgeting mistakes to avoid:

1. Trying to keep up with others

It’s common for business owners to get competitive with finances - but it’s a dangerous road to go down.

You might admire your best friends’ cars or houses at times. But it’s never healthy to compare your funds to theirs. Who’s to say that you’re in the same financial class?

You need to come up with a budget that suits your income: this type of disciplined outlook can not only change your business - but your life too.

2. Forgetting the unexpected

A myriad of things happen in life that can throw you off budget. The trick is to remember that.

For example, your cooker might pack up or car break down. You’ll need to use part of your budget to fix such emergency situations.

By considering such unexpected incidences, you can come up with a contingency plan. Always spare some money and create a “buffer” fund for emergency situations.

3. Using outdated software

Software is very useful in helping business owners create a budget. It can also help you track your expenses to ensure you don’t overspend.

However, make sure that the software you’re using is up to date. Seek professional assistance from your accountant if you’re not sure what to use or how to use it.

4. Not paying attention to the smaller items

Some small business owners have a habit of only tracking the big expenses while forgetting about smaller ones.

It could be the $20 you’re using to polish your nails or the $5 daily coffee that is throwing you off budget.

All these small purchases can add up to a significant amount by the end of the month. Ensure you track all the little expenses you’re making.

Not sure how to budget effectively? Get help…

Watch out for the above common business budgeting mistakes and you’ll at least be on the right track.

Whatever your business in making, learning to budget properly means you’ll never be caught off guard by emergency situations.

This is paramount to the success of your business and, if you need help to get there, contact us.

< Older Post Newer Post >

Need help with your accounting?

Find Out What We Do

Why Public Liability Insurance is Essential for Your Business

March 14, 2025

If your business interacts with the public — whether through customers, suppliers, events, or onsite work — public liability insurance can protect you against claims for injury or property damage. This generally covers legal costs and compensation, and although it’s not legally required, being sued for negligence can be costly (and bad for your business rep), so it’s highly recommended.

The Challenges & Costs of Exiting a Co-Ownership Property

March 14, 2025

Co-owning a property can be a practical and financially beneficial arrangement, but when circumstances change, sometimes one party needs to jump ship. Whether due to financial strain, health issues, relocation, relationship breakdown, or differing property goals, it’s not uncommon for one co-owner to buy out the other. While this process may seem straightforward, there are several financial and legal considerations to consider.

Expenses to Consider When Selling a Property

March 14, 2025

Most people who sell a property — especially if it’s their first time doing so — are surprised (and frustrated) at how complicated it can be. Expenses (expected and unexpected) are a big part of that — and there are numerous costs throughout the process. These include real estate agent fees, legal expenses, marketing costs, and property preparation. Understanding and anticipating these expenses beforehand can help ensure a smooth and well-prepared road ahead.

Understanding Dividends — Franked & Unfranked

March 14, 2025

As an accounting firm, we understand the importance of structuring investments wisely. One key aspect that investors should carefully manage is their participation in Dividend Reinvestment Plans (DRPs). These plans can be a strategic way to grow an investment portfolio, but they also come with tax and record-keeping responsibilities can’t be overlooked.

Six things to consider when starting a business

February 13, 2025

Thinking of starting a business? Here’s what you need to know! Read our latest blog to learn six key things to consider before starting your business.

Understand tax implications for tax donations

February 13, 2025

Donating to charity is a great way to give back, but did you know not all donations are tax-deductible? To claim a deduction, your donation must be made to a Deductible Gift Recipient (DGR), and can’t receive anything in return. Read our latest blog to learn what you can claim and how to maximise your tax return.