We are opening a new year , those who have not built a budget for 2014 , now is an excellent time to do so!
Here are our top ten rules of Brooks Keret to build a better budget :
1. It is desirable to build a monthly budget based on a quarterly period between one and three years of activity.
2. If you are building your company budget in Shekels, it is best to convert them by the average rate for the period prior to the construction budget to avoid a situation in which a change in the volatility of the exchange rate doesn’t have an impact on the extent of your expenses.
3 . We recommend that you classify the expenses and attribute them according to the company’s operating departments, which include all relevant costs for the departments’ activities.
4. While building the operating expenses , you must take into account all the expenses and distribute them according to categories, such as : insurance, professional expenses, travel, communications and more.
5 . When calculating salary costs , you should consider the overall employer costs, gross wages and social benefits, plus a certain percentage With respect to provisions for vacation and recreation .
6. You must take into account increases of investments in fixed assets, such as: moving offices, office improvements , electronic equipment, laboratory equipment , etc. All the above are on a cash basis.
7 . It is important to plan at least 5 % of operating expenses as unexpected expenses .
8. Assuming that this activity is distributed over several companies / projects, this should be addressed to the overall budget of the group.
9. It is customary to budget funds relative to the number of employees in the company, such as leasing expenses, welfare expenses, work stations, gifts for employees, salary related expenses and the like.
10. When you are building a budget it is important to take into account the opening balance of net cash operating costs, reserves, and capital costs .
The writer is Carmit Oron, VP of Brooks Keret.