How to Use Expense Tracking to Create an Annual Budget

Building a marketing budget based on previous year’s spending by category will help stay on track and maximize your annual marketing plans

Developing annual marketing and business plan budgets is crucial to the financial health of your small business. Accurate budgets help you achieve goals, prioritize each area of your business, and plan for the future.

But with so many variables impacting your business on a daily basis, how can you possibly project what your needs will be 12 months in advance?

A great place to begin when creating an annual budget is looking at last year’s numbers. Your business plan budget and marketing budget should be based what you spent in the previous year, while also accounting for inflation, new ventures, and changes within your company.

In order to give yourself a better idea of this year’s budgetary needs, it’s crucial to track your expenses. Accurate expense tracking does more than keep your books in tip top shape and make doing your taxes easier at the end of the year. By accurately tracking your expenses now, you’ll be able to project your budgetary needs in the future and easily meet your goals.

Luckily it’s easy to keep track of your expenses for easy budget planning. Services like Shoeboxed let you scan receipts on the go, digitizing your data into searchable write-off categories. With the Shoeboxed smartphone app, simply snap of picture of the receipt with your phone. The application will instantly beam the information to your account, keeping your expenses up to date in real time. You can also send stacks of paper receipts and old documents to be scanned, clearing your office of clutter while simultaneously tracking your expenses.

When it comes time to create a marketing or business plan budget, you’ll be able to assess the previous year’s financial activity by logging in to your Shoeboxed account. Organized categories make it easy to see where you’ve been overspending, where you can cut back, and where you can invest more in order to meet targeted goals. (You can even try ShoeBoxed Free for 30 days to see how it can help you)

Another great way to create accurate budgets is by viewing the budgets of your competitors. You can also research the budgets of businesses that inspire you, even if they’re currently spending quite a bit more than your company on their marketing efforts and other business needs.

By comparing your budget with the budget of a company you wish to emulate, you’ll be able to find keys places where you can adjust your spending in order to meet your goals. You’ll also be able to see how successful companies choose to spend their money, and make similar choices for your company.

Expense tracking is the first step toward creating a business plan budget that’s right for you so that you can create an annual marketing plan based on real expenses. Engage in strategic spending by keeping accurate records of everything you purchase throughout the year.

Your budget should account for your typical spending habits from the previous year, but also challenge you to meet financial goals, increase your revenue, and decrease your spending in areas that no longer serve you.