For many, budgeting is at best a necessary evil, and at worst an outright nuisance. If you hate budgeting, you should know you’re not alone, and it’s not necessarily a matter of procrastination. There are some real challenges inherent to budgeting for business, and those challenges can rob you of the enthusiasm required to build (and stick to) a budget.
It doesn’t have to be that way, though. Most of the major problems can be resolved with the right tool. To prove it, here are 3 big reasons you probably hate budgeting, and a solution that fixes all of them.
Tracking Cash Flow Is Maddening
When it comes to personal finances, you have near real-time information about your money. With the exception of maybe one or two credit cards, there are very few expenditures that aren’t immediately reflected in the liquid assets.
Businesses don’t work that way. Most costs are paid for using credit of some kind—usually credit cards. That means that you’re always on the line for money you don’t have a full accounting of. It can sometimes take as much as a full month to get an idea of what’s been spent in the previous month, which can leave you with a pretty muddied picture of the company’s financial health.
Worse yet, too many people have access to the spending. Beyond the accounting team, there are often business credit cards distributed to managers and others who might need to make purchases with company money. Beyond that, there are purchases made with personal cards that wind up on expense reports weeks later.
Bottom line, your money is easy to spend, and difficult to account for (no pun intended).
Estimating Future Expenditures Isn’t an Exact Science
Even if tracking money wasn’t a problem, it’s hard to estimate what you’ll need to spend in the future. Sure, you can look at the past to get an idea, and try to write a line item for everything you can reasonably predict, and even set up an emergency budget for the unpredictable. Plan and prepare as you might, you’re not Batman, and everyone but him is subject to the “of mice and men” clause of Murphy’s Law.
Most of the time, it seems like setting up a budget is tempting fate to curse you with expenses that don’t fit that budget. This means you keep coming in over budget, which usually results in setting a budget that can gives too much wiggle room—and then that “extra” ends up being spent, since it’s “in the budget.” No matter what you do, you’re spending more than you want to.
Restricting Spending Feels Like a Financial Diet
In a perfect world, we’d all be able to eat whatever we want, and never have to deal with negative health ramifications from it. Similarly, in a perfect business world, we would be able to spend as much capital on the things we wanted for our business, and not have to worry about the bottom line.
Having to be “smart” and “responsible” with our financial health isn’t usually very fun (though it may save us a lot of stress). As a result, many businesses avoid being smart with their money, or having someone oversee the budget (and the inevitable budget concerns) to tell them when to eat their vegetables. This, as you might expect, leads to financial overeating, and can severely damage the health of your company.
Proactive Budgets Don’t Have to Be a Pain
The good news is, you can get around these problems, and make budgeting a (relatively) refreshing activity. The secret is having the right tool for the job, and that’s where Divvy comes in.
Divvy is a proactive budget app that can provide real-time information on budget spending, all across an organization. You can use it to give employees access to funds, manage subscriptions, create secure online virtual cards, and ultimately, effectively eliminate expense reports. In other words, Divvy is the secret to making and following a budget that actually works. And best of all, the platform is free to use.
So go ahead, and give it a try. And if you have any concerns or questions about how Divvy can make your financial management a breeze, feel free to contact our team of experts to learn more.