Expense planning is one of the most important parts of any business. With that in mind, just how can you plan for your business expenses? There are many expense types to consider:
- General: these are things that the company spends money on like rent, phone bills, supplies, taxes, and more.
- Special: these are services or products offered by the company. Direct: this refers to travel, commuting, car repairs, etc. Work related: all the activities in the workplace, which relate directly to the business.
Every business should have a good expense planning process to keep them out of trouble. Expense planning involves compiling a list of all the expenses that your company incurs, then categorizing those into different expense types. Expense planning is not only done once; it’s a continuous process. The purpose of keeping a detailed, and organized expense planning process is to help the company maximize its resources, and financial growth.
Many businesses are using expense budgets to help them manage their finances better. The most common way to do so is through expense plans, which break down expenses directly into categories. For example, the company may create a driver-based budget, which has categories like fuel expenses, wear and tear expenses, and vehicle maintenance expenses. By doing so, the driver doesn’t have to spend a lot of time hunting down each category individually. Expense planning also helps businesses with their strategic planning.
Expense Management requires the collection of data, and then the generation of an expense budget, which specifies the cost, schedule, goal, and timing of project activities. One such tool is the project dashboard, which uses a point-and-click methodology to create expense grids and reports. Project dashboards are designed to assist project managers in making the most efficient, and effective allocation decision, while enabling them to make quick comparisons across projects, and spending accounts.
When you check the “check box” beside the target date for the project expense, it will automatically calculate the target date and expense amount. You can change the start and end dates, days, and hours of operation, as well as the target date range. To calculate the target date and expense amount, you must have a current date, which can be used as the start date or end date. You can choose to include or exclude certain dates or cells. The cell contents will determine if the day, month, or year is known.
Expense planning project expenses can also be achieved by tracking project expenses as they occur. This is known as driver-based costing. It uses a driver’s knowledge of the expenditure patterns associated with his or her own department or job within a company. This method has the advantage of allowing the manager to make allowances for possible expenses that were not considered in the original budget assumptions. When you check the “check box” beside the target date for the expense, it will automatically calculate the target date and expense amount.