My boss asked me to come up with a budget for 2008 per month for bank service charges and insurance. How?

Answer 1

Look at 2007 bank services, charges, and insurance. Assume a worse or better year--say 12% growth in business over 2008. And use those numbers.

If last year's January was $2,000 in charges, say 2008 January will be $2,024.

If you want to raise charges by 2% and assume 12% growth in sales, then use 12% plus 2% (1.12*1.02*[bank charges of 2007]).

Plus, get the boss's input.

It is not as simple as this. You can have 1,000 reasons for the numbers changing. For instance, new charges, new types of accounts. But this is usually a good starting spot.

Answer 2

The more history you have the better off you will be. The bank service charges should be pretty flat. Most business account charge a flat fee per month and allow for a specific number of transactions (either deposits or checks clearing the account). What ever it is, contact your bank and make sure the fee structure is what you think it is and go with that.

The same can be said for the insurance costs. You should look for at least 3 years of history of what your insurance rates have been. If they have been going up 10% each year, continue with that number. They could be going up because your business is growing and needing more coverage or just because rates always tend up over the long period. Again, contact the person with the numbers. Call your agent and find out what is going on in the market and get a quote for your insurance over the next 1-3 years.

When you are about 1/2 way done, talk to your boss to make sure he/she is OK with your valuation basis.

Good Luck

Answer 3

easy way out:-

1) pay an accountant to do it for you.
2) DELEGATE / EMPOWER you subordinate to do it and you MONITOR him/her to make sure it is done PROPERLY.


abit harder way:-

1) take the 2007 budeget, follow the format and bullcrap you way through by changing here n there. Make sure u get your basis ready for - - why you change the figures + why don't you change it! There is no hard and fast rule for preparing budget. No 1 knows what will happen in the future. Btw, by reading lots materials does help in bullcraping your way through LOGICALLY. The word LOGIC is the most important factor in deciding the "performance" of your budget.

GOOD LUCK