A question we hear more often is: "What are the steps to follow to make sure my plans are as realistic and useful as possible?" Here are our thoughts on this.

Take time for planning

If you invest some time in creating a realistic budget, it will help you to prioritise in operations according to your specifications and it will make subsequent controlling easier.

Use the previous year's figures - but only for guidance

Pay attention to and analyse your previous year's figures - this can give you a good indication of likely sales and costs. This is often referred to as a base plan. This should then be the starting point for the focus in the current business year. On this basis, consider your sales plans, what additional costs you are planning compared to the previous year and what investments you would like to make.

Create realistic plans

Make sure your plan contains enough information to easily monitor the key drivers of your business such as turnover, costs and working capital. Follow the 80 / 20 rule. If you don't spend so much time on smaller budget items, you can think more about the sales drive and its impact on the numbers.

Always keep in mind the dependencies. If you want to make more turnover, this usually leads to higher costs, such as more material purchases, the purchase of external services and more personnel.

Involve the right people

Planning should always be a team effort. Jointly developed plans have a higher probability of being achieved and automatically lead to higher commitment. The team understands your priorities and you gain insight into the thinking of your staff.

Use a tool to support

You should use a software tool for plan development and subsequently for controlling. The accounting system is often used here. However, this has the disadvantage that it usually reflects the entire complexity of accounting. COMMITLY makes it easy for you to create, discard and fix plans and to continuously monitor the achievement of plans.

Credits: Photo by Samuel Zeller on Unsplash