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Step 1
Review your goals and objectives. To create a relevant and useful budget, it must be tailored to the needs of your organization. If you need detailed information, then you need a detailed account structure.
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Step 2
Review any documentation you can use to support your budget numbers. An income statement, balance sheet, debt, tax returns and projections will help with estimates. If you're just starting, use financial statements from your business plan.
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Step 3
Determine the expense categories. These are expenses such as rent, prepaid costs, utilities, supplies and loan repayments. Your income statement will help to determine the specific costs to budget and how much you should budget. Use current cost levels (as a percentage of total sales) and averages to estimate what costs will be.
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Step 4
Determine the time intervals. This is a fiscal budget, so it will look at an entire year; but will the time intervals be days, months or quarters? This depends on the frequency of use. If you plan on accessing your budget daily, daily increments may be necessary; however, if you plan on reviewing the budget at the end of each monthly close, monthly increments will be more appropriate.
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Step 5
Create the budget. Using a spreadsheet or business software, start at a high level and then drill down.
