Good financial planning helps managers to have a more accurate perception of the company’s real financial situation. From this, it is possible to optimize decision-making and devise more assertive strategies that enhance the growth and performance of the business.

But how to make a good annual budget for your company? Check out in this post some unmissable tips for not making mistakes when making your financial planning.


Align the annual budget to organizational strategy

Financial planning must always be well aligned with the company’s overall objectives. Is the idea to grow and expand operations? Investing in new segments? What is the company’s idle capacity and how far can it grow without having to invest in expanding its structure? Is the company financially prepared to expand its operations and support a supposed growth in demand?

The definition of the annual budget must consider information from different sectors of the company, such as the commercial sector, the production sector, the structure of logistics, among others.

Consider multiple scenarios

When defining the next annual budget, it is important to consider different scenarios. Although it is not possible to predict the future, it is possible to create strategies to deal with possible adversities or opportunities.

It is recommended that at least three scenarios be created in order to facilitate planning and increase assertiveness. For example, within a positive scenario, what would the company’s expected revenue and spending structure be? In a negative scenario, what is the minimum monthly income capable of covering the company’s main fixed and variable expenses? What strategies will the company use to keep its accounts in order if there is a sudden increase in demand or a sudden drop? It is important to keep in mind that there are many possible scenarios and you need to be prepared to deal with them.

Set goals when preparing the annual budget

As in other sectors, it is important for managers to set goals to control the performance of the companies’ financial sector when the annual budget is drawn up.

There are several metrics that can be analyzed when planning finance such as profit margin targets, expected revenue, debt ratio, fixed costs, variable costs, etc. It is important, however, that the goals are realistic, achievable and that they are in line with the organizational strategy.

Track the results

How to make a good annual budget

It is not enough to define an annual budget, outline goals and define objectives and only analyze the results achieved in the following year. It is necessary to regularly monitor the results being achieved and create corrective action plans whenever these results are not in accordance with the organizational expectation.

To do so, create indicators and compare the results being achieved periodically with the established goals.

Use the proper financial management tool

The use of good financial management software helps the company to organize its finances and assess its real financial situation. Using the right tool, it becomes much easier to generate reports, analyze cash flow and obtain various other information that can be decisive for formulating strategies for the next year.

For example, which product was the best seller in the last year? Which products performed below average? In which region do the company’s products have the best acceptance? How much was invested in marketing and which media brought the best results?

Answering these and other questions makes it much easier to decide on future investments and leverage the results of each decision.

There are several options for financial management software today. One example is  Controller, a software that has become quite popular for allowing easy and dynamic management of your company’s finances.

Analyze the financial transactions for the period that is ending

In order to be able to deeply analyze the situation of your finances, it is important that all the company’s financial transactions have been registered throughout the year. The use of financial software, in this sense, once again helps the manager to organize entries and access data more easily.

Assuming that all your income and expenses were properly registered throughout the year when it comes to a good budget for the next year, it is important to analyze the expenses and income incurred.

In which categories did the company spend more than it should? What factors do these expenses refer to? What were the company’s main sources of revenue? Which products had the best commercial performance?

Through a detailed analysis of the current financial situation, it is possible to create strategies that optimize the use of the company’s financial resources in the coming year.

Cut unnecessary expenses

When the accounts for the previous period are analyzed, the manager becomes aware of various expenses that could have been avoided. These unnecessary expenses can range from wasted office supplies to inefficient company processes.

For example, the company may be paying employees a lot of overtime because its production process is not well structured. Identify unnecessary expenses and make sure they don’t happen again next year.

Good financial planning can ensure that your company achieves a safe and sustainable growth trajectoryIf you haven’t started preparing your company’s annual budget for the next year, don’t waste your time.


The Controller is done online financial management system to help small businesses and startups to make decisions increasingly assertive, facilitating management and improving its financial results. A tool that transforms taking care of finances into something uncomplicated and pleasurable.