3 reasons your business needs a budget now
For many, the word ‘budget’ is about as appealing as the word ‘diet’.
It seems to imply what you will go without, rather than what you will achieve.
To a successful business owner, however, the word ‘budget’ has a very different meaning.
It’s more like a map than a diet. It’s an outline of where you want to take the business, and what you need to achieve to get there.
Running a business without a budget is like a ship’s captain setting off on a voyage without a map. Sounds ridiculous, doesn’t it. Who would do that?
Yet this is, figuratively speaking, what many business owners do.
Successful business owners, on the other hand, not only set clear targets and budgets each year, they monitor them closely each month, even each week, and adjust them as they go throughout the year.
Here are 3 compelling reasons your business needs a budget, now:
One:
If you don’t know where you’re going, how do you know you’re not already there?
If you’re not satisfied with how your business is performing, unless you set clear goals for where you want to take it, it’s probably as good as it is ever going to get. At best, it will just meander along, subject to the whims and vagaries of the economy and general market conditions.
The good news is that your business doesn’t need to meander along.
The first step in charting a clear course for growing and developing your business is objectively measuring ‘where it’s at’ right now.
And the numbers do tell a story.
For some, they act as a wake up call. For others, they just confirm the journey’s starting point.
It’s paradoxical that a large part of the value in a business budget is not in the numbers themselves. It’s in the realisation and acceptance of where you are and where you want to be.
The numbers are just the signposts for the journey.
A factual look at the numbers that describe where your business is right now takes away all the subjectivity, opinions and ‘reasons’ (often excuses, disguised as reasons).
This is the naked truth.
In fact, it is like standing on the scales, naked, looking at yourself in a full length mirror. That may or may not be a pretty sight!
For your business, these factual numbers are the sales, the variable costs, the margins, the overheads, and, lastly, the profit. After all your work, this is the reward you’re left with.
Then comes the first of a series of ‘hard questions’...
- Are you happy with that profit?
- Is it worth it? Or are you dissatisfied? Then ...
- What do you want those figures to look like?
Answer those questions, and you’ve just described where you want to be. Congratulations! You have charted your course, which is the first step to ensuring your success.
Two: What’s more important to treat? Symptoms or causes?
As you well know, sales don’t just happen. Costs don’t drop just because you want them to. Sales and costs are a result of other underlying factors. Put another way, they are symptoms of causes.
The business budgeting process quantifies the symptoms, and by asking a series of ‘What leads to this number?’ questions, it also identifies the underlying causes.
For example, underlying factors contributing to a sales (revenue) figure could include:
- the number of calls made,
- the number of customers walking through the door,
- the percentage of conversions of enquiries or walk-ins to sales, the dollar value of the average transaction, or simply
- where your marketing is targeted.
These are all called drivers. The sales figures are simply a result of these drivers. Costs are no different.
For example, the rent paid may be a result of the storage you need for your stock levels. Wages costs may be blowing out as a result of overtime paid but underlying that may be inefficient staff. Or a lack of clear processes. Or both.
So in reality what came first was not the sale or the cost, but their underlying drivers. The budgeting process forces you to name and to quantify these underlying drivers.
That’s one of the most valuable aspects of preparing your budget. Not the budget itself, per se, but identifying your business’ drivers.
Why?
Because then you can focus on improving them.
That’s what will produce the improved results in your business. No focusing on last quarter’s figures. That’s history.
It’s more fun to create history. And that is, in essence, what you are doing when you are in your own business. You are captain of your own destiny, and you can steer it in any direction you want.
Note that word ... direction. A key point is to have one.
You will enjoy how effectively the budgeting and planning process will get you crystal clear on your direction.
Three: Budgeting is not about accounting. It’s about being accountable.
Once you are clear on the handful of drivers that creates your business’ results, the next question is…
What are you going to do about it?
Your budget won’t just give you a monthly sales target, for example, it will help you quantify the drivers that will produce the result.
For example, if next month’s sales target is $120,000, that end-result figure is not your focus. Not on a day-to-day basis. Knowing the underlying drivers, your focus will instead become, for example:
25 calls per day (Driver No.1)
At 80% conversion rate (Driver No.2), with
Each customer buying an average of $300 worth of products (Driver No. 3).
Now you and your staff have a clear focus and are 100% accountable.
That’s good for them, and good for you and your business.
People in a business want a clear scoreboard and a ‘game to play’ so they know whether or not they are winning. Research has found that a lack of measurement in a job is demotivating to a staff member. Patrick Lencioni’s book ‘3 Signs of a Miserable Job’ gives some great examples of this.
Knowing these drivers, and quantifying a target for each you can then ask questions like:
- Have the 25 calls been made today?
- If not, why not? Is the target realistic?
- Does the team need training?
- Do they need better telephone equipment or dialing software?
- Or just more focus?
- Or guidance on what their task priorities should be?
- Or a combination of these?
- Are we being effective and converting 80% of the calls?
- Again, if not, why not?
You can then decide to improve skills, or systems, or attitude, or all three!
As you can see, the power of the budget is in the process of preparing it, and then the budget itself is a tool to hold you accountable to the measurable indicators you’ve chosen.
An added layer of accountability is... us.
We work with a number of clients where, on either a monthly or quarterly basis, we act as a sounding board and independent party to ask you the hard questions about the drivers and the results. This focuses your mind, allows you to form a clear Action Plan to improve results, and then increases your chances of success because you know you need to report in to us next time.
It’s a powerful process that you’ll enjoy due to the focus it creates and, in turn, the results that focus achieves in your business.
To take more control of your business and its performance, get in touch to make a time to come in and see us. Depending on the size of your business, we might work out that a quarterly process might work best (and be the most feasible, cost-wise), or your business might be at a point where monthly or even weekly guidance would be ideal.
Either way, we’ll outline your options and your costs so you know precisely what’s involved.
We look forward to helping you chart your course, helping to get a clear direction, and then keeping you and your business on course.
After all, you won’t end up at the ideal destination by drifting.
Need help with your accounting?
Starting a business is an exciting milestone, but the paperwork can quickly become overwhelming. At Ascent Accountants, we often see new business owners get caught in the "registration trap"—either registering for everything at once (and creating unnecessary admin) or missing critical deadlines that lead to penalties. Knowing which registrations are mandatory and which are optional depends on your business structure, turnover, and whether you have a team. Here is our high-level guide to the essential registrations you need to consider. 1. The Foundations ABN & TFN. Australian Business Number (ABN): Your ABN is your business’s unique 11-digit identifier. While not strictly compulsory for everyone , you almost certainly need one. Without an ABN, other businesses must withhold 47% of any payments they make to you. Tax File Number (TFN): Sole Traders: You use your personal TFN. Companies, Partnerships, and Trusts: You must apply for a separate business TFN. 2. Tax Registrations (ATO) Goods and Services Tax (GST): You must register for GST if your business has a GST turnover of $75,000 or more ($150,000 for non-profits). If you drive a taxi or provide ride-sourcing services (like Uber), you must register regardless of your turnover. Fuel Tax Credits: If your business uses fuel in heavy vehicles, machinery, or for other eligible activities, you can claim a credit for the excise or customs duty included in the price. Note: You must be registered for GST before you can register for Fuel Tax Credits. 3. Employer obligations when hiring a team. If you’re moving from a "solo-preneur" to an employer, your registration requirements change significantly: PAYG withholding: You must register for Pay As You Go (PAYG) withholding before you make your first payment to employees or certain contractors. This allows you to withhold tax from their wages and send it to the ATO. Superannuation: You don't "register" for super in the traditional sense, but you have a legal obligation to pay the Superannuation Guarantee (currently 12% on July 1, 2025) for eligible employees. We recommend setting up a Superannuation Clearing House to streamline these payments. On 1st July 2026, super will be required to be paid each payday. Workers’ compensation insurance: This is a mandatory insurance policy for almost all employers in Australia. It protects you and your employees in the event of a work-related injury. Each state has different rules; for example, in WA, you must have a policy if you employ anyone defined as a "worker." 4. Business Identity: ASIC If you want to trade under anything other than your own legal name (e.g., "John Smith" vs. "Smith’s Landscaping"), you must register the name with the Australian Securities and Investments Commission (ASIC). Our advice? Don’t over-register too early. We often see clients register for GST before they reach the $75k threshold. While this allows you to claim GST credits on your setup costs, it also means you must lodge regular Business Activity Statements (BAS). Speak with us before you hit "submit" on your registrations. We can help you determine the most tax-effective timing for your specific situation. Contact the team today.
When you find your dream home, the process often feels like a whirlwind of inspections, mortgage documents, and packing boxes. Most buyers are diligent about checking for termites or structural cracks, but there is one significant risk that a physical inspection can’t uncover: legal defects in the property’s title. When it comes to real estate, one of the most effective ways to safeguard your equity is through Title Insurance. What is title insurance? Unlike standard home and contents insurance—which covers future events like fires, storms, or theft—Title Insurance is a specialised policy that protects you against existing but unknown legal risks that occurred before you bought the property. It is a one-off premium paid at the time of settlement that provides cover for as long as you own the home. Despite its value, statistics suggest only about 50% of buyers currently opt-in. How it works: real-world scenarios. Title insurance steps in when "discrepancies" surface after you’ve already moved in. Here are the most common ways it protects you: Illegal building work & conversions: It’s common to find a garage that was converted into a bedroom or a deck built without council approval. If the local council discovers this later and demands you bring it up to code or demolish it, Title Insurance can cover the legal and construction costs. Boundary & encroachment issues: Imagine discovering your fence, garage, or driveway is actually sitting on your neighbour’s land or Crown land. The cost of surveys, new building plans, and reconstruction can be staggering. Title insurance handles these expenses. Unpaid rates or taxes: If the previous owner left behind land tax or council rate debts that weren't discovered during settlement, the policy can cover these outstanding costs. Planning & zoning violations: Protection against loss if you cannot live in the house because it doesn't comply with local zoning laws. Is it worth It? These problems often stay hidden for years. You might buy a house that looks perfect, only to find out it has issues when you apply for your own renovation permits. For a relatively low, one-time fee, Title Insurance offers "peace of mind for your purchase." However, it is not a substitute for due diligence. Before you sign: Consult your conveyancer: They can help you finalise the policy during the settlement process. Research the provider: Ensure the company has a strong history of payouts and longevity in the market. Review the coverage: Understand what is specific to your property type (e.g., strata vs. green title). The Ascent perspective. From a financial planning standpoint, an unexpected $20,000 council-ordered demolition or a boundary dispute can derail your investment strategy. Title insurance is a small price to pay to ensure your property remains a secure asset rather than a legal liability. Are you planning a property purchase? Talk to the team at Ascent Property Co and Ascent Accountants to ensure your tax and financial structures are as solid as the roof over your head.
From 1 July 2026, the way employers make superannuation guarantee (SG) contributions will change. The Australian Taxation Office (ATO) has introduced Payday Super . This reform requires employers to pay super at the same time they pay employees’ wages. This is a significant update to the timing of super payments, and it’s important that your payroll processes and software are prepared well before the new rules commence. For full details, including eligibility and exceptions, see the ATO’s information on Payday Super. Key changes. Current requirements. Under the existing system, employers can make Super Guarantee payments to an employee’s fund up to 28 days after the end of the quarter. SG can be paid quarterly or more frequently (for example, monthly), and the current quarterly due dates are 28 October, 28 January, 28 April, 28 July. From 1 July 2026 Under the new Payday Super regime, Super Guarantee payments must be paid to an employee’s super fund at the same time as paying qualifying earnings (QE) — that is, on the employee’s payday . The payment must be received by the super fund within 7 business days of payday. There are limited exceptions to this 7-day deadline, such as for new employees. What you should do now. To ensure compliance with the new requirements, we recommend the following steps: 1. Review your payroll software and processes Confirm that your current systems can support on-payday super payments. If updates or changes are required, plan for implementation well in advance of July 2026. 2. Adjust internal procedures Update payroll calendars and workflows to align with the new payment timing, and ensure responsibilities and deadlines within your team are clear. 3. Seek advice if needed If you are unsure how the changes affect your business, or if your current setup requires modification, please contact us! We are here to help. 4. Review business cashflow. Ensure that the business cashflow will allow you to pay the superannuation on time, each payday. If not, you’ll need to put plans in place. We’re here to support you. These changes will affect all employers with staff and will require planning and preparation. If you have any questions or need assistance reviewing your systems and processes, please get in touch with the Ascent team.
Set business goals you’ll actually hit. Track what matters, review often, celebrate wins, and make growth intentional. Read today’s article to learn more.
Understand the difference between major and minor building defects before you buy. Learn what’s serious, what’s wear and tear, and avoid costly surprises.
Thinking of starting a small business? Before you dive in, make sure your foundations are set: structure, ATO registrations, super, and workers comp. We’ve put together a simple guide to help you get started.
