Help Your Clients Budget Better: Top 3 Things You Should Warn Your Client About When Setting Financial Budgets

Posted on 7th May 2016 in Forecasting

Written by Amy Harris

Everyone likes providing their clients with good news, especially when it relates to growth in their cash flow, but what are the warning signs you absolutely must flag?

Nothing is better than providing your client with good news, be that healthy profit margins, strong cash flow, or a lower than expected tax bill. If the news is not good, nobody likes being the harbinger of doom. This is particularly relevant when working with the entrepreneur who welcomes risk, and is not afraid to embrace it when planning for the future.

Yet as their accountant, you know it’s critical to adopt the risk-averse position the entrepreneur may not be prepared to take.

When helping clients set a financial budget, here are three things you will want to bring to their attention.

Be prepared to deal with reality and revisit often

Your client might be satisfied with a ‘finger in the air’ approach to budgeting, making decisions based on their gut and dealing with the consequences later. Perhaps not even consulting you on these decisions. It is therefore crucially important for the long-­term success and health of their business that they deal with reality.

This includes periodically tracking and inputting actual spend and income in order to evaluate performance. Once they have compared their actual spend with their anticipated spend, you can then better help them look for trends and improvements when budgeting for the next month (or more often).

Don’t be headstrong

An admirable (for the most part) trait of entrepreneurs is their ability to be strong ­willed when it comes to decision making. Setting a financial budget is one such situation where this trait needs to be curtailed, particularly if your client is leading a larger organisation with a number of key stakeholders.

It is necessary that they include any members of their organisation who have financial responsibilities when setting a budget. This will create a more accurate and achievable set of numbers, and also provide a boost to the motivation of your client’s team, as they become more invested in making the budget work having been a part of its creation.

Don’t let growth stagnate or spiral out of control

When it comes to budgeting, most people will think of it as a means of ensuring a business isn’t spending more than it’s earning. The flipside to this is that the business might not be spending enough to grow and compete.

If your client is focused on growing their business, then you must make them aware of the need to budget accurately and consistently so as to ensure growth does not stagnate through inaction or lack of investment.

Conversely, businesses can grow too quickly, so this must also be considered when setting a budget. Your client has to be steered clear of finding their business at absolute capacity, yet not profitable.

Planning is key

Helping your clients set regular and accurate budgets will make both your lives easier in the long run. When you transfer their budgeting from risk-prone spreadsheets to FUTRLI, our all-in-one forecasting and reporting engine, you’ll change this for them forever.

Budgets in FUTRLI are risk-free and can immediately be made 3-way. Too many forget the impact on the balance sheet in this process. Setting budgets in the cloud makes sense for the long-term: so why would you have this information as a separate service offering, disconnected from their accounts package?

This leads to time-consuming, thankless, manual updates and the data cannot be used to drive the business forward. FUTRLI glues together a business’ past, present and future to give you and your client an operational tool to deliver a brighter, more profitable, future.

Help your clients budget better

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