Why and how can you control costs and budgeting in a business?

Question

I need to know

1. Why costs and budgets need to be controlled

2. How you can Control them

&

3. What you can do if the business doesnt have a controlled budget to help prevent them going bust.

Answer 1

A new business needs to keep track of cash flow.  Start with total money invested...and all money added to the investment.  Then where did it go?  Costs should be listed in a journal with dates and amounts.  At the end of the month you should know the amount you invested.  Costs of goods sold.  Your bottom line profit.  You can compare each month with same month last year to see if business is getting better, if costs are going higher, what months are better.  Then you will need an accountant to help set up a proper accounting system.  You develop ideas to cut costs.  Often it takes time to grow a business.