Covering Your Assets: Time is now to take hard look at your 2021 budget

By Mike Bosma, CLA

Mike Bosma

As 2020 comes to a close, many organizations may have outstanding questions regarding how to approach 2021 budgeting. It’s important to have a plan in place, especially for construction and manufacturing organizations, to outline expectations for what you want to achieve in a particular period.

Budgeting has been imperative for construction and manufacturing companies in any business climate, but it’s even more important as we look to navigate COVID-19’s impact.

The inherent issue with a budget — and where many business owners get stuck — is that it is difficult to effectively predict which projects will be available to bid and whether your bid will be the one that is accepted. As a result, many budgets never get off the ground because business owners don’t know where to start.

Budget, forecast and plan for 2021

Focus on contracts where you have experience and where you are reasonably certain you can make a gross profit that will cover the general and administrative expenses and allow you to generate a net profit. Then determine whether the budget will allow the company to pass debt covenants.

Read the entire article at NNBW:  https://www.nnbw.com/news/covering-your-assets-time-is-now-to-take-hard-look-at-your-2021-budget-voices/