When you stick to a budget for your personal expenses, you're more likely to reach your financial goals. And the same is true for your business. It's simply able to function more efficiently when you implement business budgeting systems and tools.
A budget for your business can help you better understand where your cash is going. And with that understanding, you can identify financial opportunities and concerns more quickly.
Keep reading to learn more about why business budgeting systems are needed and to see a quick list of some of the best tools available today.
Why Your Business Needs A Budget
As a business owner, creating a budget for your business could allow you to take your company to the next level. A better understanding of the money flowing in and out will help you make money decisions that align with your business goals.
Profit First, a book that guides readers to build better accounting systems within their business, offers practical advice to achieve financial success in a business. The key concept of the book is to replace the traditional business accounting formula (Sales – Expenses = Profit) and replace it with a formula that prioritizes profits (Sales – Profit = Expenses).
There are many examples of success through this business budgeting method. And business budgeting systems and tools can help you gain the most from the Profit First Method.
The potential benefits of a business budget are clear. But getting started is the tricky part. Luckily, there are several business budgeting systems and tools that can help you create and manage your business budget with minimal hassle. Let’s explore your options!
Best Business Budgeting Tools
When setting up a budget for your business, take advantage of existing systems and tools. There is no need to start from scratch when there are so many budgeting systems and tools ready to help you. Here's a closer look at the top business budgeting systems and tools available today.
1. Novo
The right bank account can be the best tool for small business owners. Novo is a tech company that has designed a bank account with small business owners, entrepreneurs, and freelancers in mind.
Not only is this bank account easy to open, but there are also no ongoing fees to consider within your budget. Creating and managing invoices within this account makes it a useful option for any business owner.
As a budgeting tool, Novo can be very useful. You’ll have the option to set aside funds within your account to pay for a planned expense or cover your paycheck. These sub-accounts, or envelopes, can help you manage your business finances without wondering what cash is already earmarked in your account. And everything can be managed directly from your app or online.
The only drawback of this business tool is that you won’t be able to make cash deposits or write a physical check. But the money planning features within this account can outweigh those minor inconveniences.
2. Lili
Are you running a freelancing business? Lili Bank might be the perfect account for you. The mobile bank was explicitly designed to help freelancers to manage their business more efficiently.
Lili is a helpful budgeting tool because it provides free reporting about your business income. The reporting features of the banking app are completely free. With that, you could save on paying for a different business reporting software since there is not a monthly fee to work with Lili.
The standout feature of this tool is that Lili will automatically set aside money for taxes and emergencies. You can set up the amount that you would like to save each day for your tax liabilities and future emergencies. Lili will take care of setting aside those savings on a regular basis.
When you open an account with Lili, you’ll be able to manage everything directly from the app. There is no online option, so it might not be a good fit if you prefer to manage your finances from a desktop.
3. QuickBooks Online
QuickBooks Online is one of the most popular budgeting systems for small businesses. The accounting system offers a variety of features to help you track your expenses, monitor your tax liability, and plan for your expected cash flow with simple reports.
When considering QuickBooks Online, you’ll need to choose between four pricing tiers:
- Simple Start: $25/month
- Essentials: $40/ month
- Plus: $70/month
- Advanced: $150/month
But you can test drive QuickBooks with a 50% discount for the first three months. You can select the level of QuickBooks that works best for you. But the Simple Start plan is more than enough for new entrepreneurs. You can always upgrade if you need to.
With the help of QuickBooks, you can send invoices and manage the reports from your app. Plus, this system syncs to your bank account automatically to make life easier.
4. Wave Accounting
If you like the idea of using QuickBooks but would like a lower price point, Wave Accounting could be a great solution. The accounting software is completely free to use. Although there are fewer features available, all of the basics are there to help you manage your business.
You can invoice quickly and monitor your business budget with free basic reports. The ability to sync to your bank account directly makes tracking expenses simple.
If you need more help, you can pay for additional services with Wave, such as bookkeeping. As a free business budgeting system, Wave Accounting is a useful way to get started.
5. FreshBooks
FreshBooks is another popular business budgeting system that makes managing your business finances easier. In addition to simple invoicing features, you may enjoy the time tracking abilities and project management features offered through FreshBooks.
To work with FreshBooks, you’ll need to choose from four plans:
- Lite: $4.50/month
- Plus: $7.50/month
- Premium: $15/month
- Select: Custom pricing for complex business needs
Although Lite is the most affordable option, it's limited to 5 invoices per month. Many businesses will need to spring for the Plus option which allows you to bill up to 50 clients per month.
FreshBooks offers minimal expense tracking features. But it shines in the invoicing area, which allows you to accept several online payment options. If you only need high-quality mobile invoicing features, FreshBooks is a worthwhile choice.
Final Thoughts
When selecting the right business budgeting systems and tools for you, take some time to examine each option’s features. Look for a tool that makes sense for you and your business. With slightly different features offered by each budgeting tool, you can build a budgeting system that works for your specific business needs.
Sarah Sharkey is a personal finance writer covering credit cards, mortgages and student loans. She has written for numerous finance publications, including MagnifyMoney, Business Insider and ChooseFI. Her blog, Adventurous Adulting, helps young adults get a handle on their finances.