The document outlines best practices for budgeting and financial tracking for startups and small companies, emphasizing the importance of establishing a relationship with a tax accountant and using accounting software like QuickBooks or Peachtree. It advocates for keeping financial reports simple and timely to assist managers in decision-making, and highlights the need for key reports, such as monthly financial summaries and biweekly productivity data. Ultimately, the document stresses that effective financial management is vital for the success of any company, particularly in low-margin industries.

1. Budgets
&
Tracking Financials
David Ellison,
Owner of Ellison Management & Training;
Owner of Connections in Ohio

2. For Start Up or Small Companies
• Set up a Relationship with a Tax
Accountant IMMEDIATELY!! Establish
Cash or Accrual
2

3. For Start Up or Small Companies
• Set up a Relationship with a Tax
Accountant IMMEDIATELY!! Establish
Cash or Accrual
• Accounting Software for Small
Companies – Either Quickbooks or
Peachtree will work
3

4. For Start Up or Small Companies
• Set up a Relationship with a Tax
Accountant IMMEDIATELY!! Establish
Cash or Accrual
• Accounting Software for Small
Companies – Either Quickbooks or
Peachtree will work
• Let the Tax Accountant set up the G/L
Categories and Instruct on Routine
Entries
4

5. For Start Up or Small Companies
• Set up a Relationship with a Tax
Accountant IMMEDIATELY!! Establish Cash
or Accrual
• Accounting Software for Small Companies
– Either Quickbooks or Peachtree will
work
• Let the Tax Accountant set up the G/L
Categories and Instruct on Routine Entries
• You do not need an Accountant inside
your company when you are small
5

6. MUST HAVE These Reports
• Monthly Financial Summary Sheet – by the
7th of the month
6

7. MUST HAVE These Reports
• Monthly Financial Summary Sheet – by the
7th of the month
• Biweekly Productivity Data – by the 5th day
after the payroll ends
7

8. MUST HAVE These Reports
• Monthly Financial Summary Sheet – by the
7th of the month
• Biweekly Productivity Data – by the 5th day
after the payroll ends
• Simple Budget with very few categories and
then OTHER!! – Only track categories that
account for the major costs and/or can be
managed by day-to-day managers
8

9. MUST HAVE These Reports
• Monthly Financial Summary Sheet – by the
7th of the month
• Biweekly Productivity Data – by the 5th day
after the payroll ends
• Simple Budget with very few categories and
then OTHER!! – Only track categories that
account for the major costs and/or can be
managed by day-to-day managers
• Cash Flow Report – I spent a whole webinar
on this in March
9

10. Who are Budgets & Financial Reports
Really For??
1) 12 Months a Year – Financial Reports and
Information are to “manage” the business
– So they must be simple and fast
10

11. Who are Budgets & Financial Reports
Really For??
1) 12 Months a Year – Financial Reports and
Information are to “manage” the business
– So they must be simple and fast
2) 1 Day a Year – They are for tax
accountants!!
11

12. Who are Budgets & Financial Reports
Really For??
1) 12 Months a Year – Financial Reports and
Information are to “manage” the business –
So they must be simple and fast
2) 1 Day a Year – They are for tax accountants!!
3) Whether you are a “cash” or “accrual”
company in your accounting, there is only
ONE DAY that the financials are REAL – The
last day of the yearly accounting period!!
12

13. If Reports are Late or Do Not Have
Useful Information, it tells me:
1) The Financial Person does not
understand their role, which is “to get
daily managers fast and simple
information to make decisions.”
13

14. If Reports are Late or Do Not Have
Useful Information, it tells me:
1) The Financial Person does not
understand their role, which is “to get
daily managers fast and simple
information to make decisions.”
2) The Program Managers do not care
about financial indicators, OR are too
passive to request better information.
14

15. If Reports are Late or Do Not Have
Useful Information, it tells me:
1) The Financial Person does not
understand their role, which is “to get
daily managers fast and simple
information to make decisions.”
2) The Program Managers do not care
about financial indicators, OR are too
passive to request better information.
3) A. C. P. example
15

16. Keep Budgets & Budget Reporting Very Simple
• Account for the big ticket expenses – wages, payroll
taxes, benefits, mileage, supplies, telephone,
program activities, etc. – In my company, these
manageable costs account for 85% of all expenses.
The rest I put in OTHER.
16

17. Keep Budgets & Budget Reporting Very Simple
• Account for the big ticket expenses – wages, payroll
taxes, benefits, mileage, supplies, telephone,
program activities, etc. – In my company, these
manageable costs account for 85% of all expenses.
The rest I put in OTHER.
• If your company has capital – buildings and vehicles –
then these are tracked separately within the budget.
17

18. Keep Budgets & Budget Reporting Very Simple
• Account for the big ticket expenses – wages, payroll
taxes, benefits, mileage, supplies, telephone,
program activities, etc. – In my company, these
manageable costs account for 85% of all expenses.
The rest I put in OTHER.
• If your company has capital – buildings and vehicles –
then these are tracked separately within the budget.
• Create budget estimators for all major categories –
remembering that the WHOLE is more important
than the parts – Modify the budget quarterly or at
the half year based on performance and the WHOLE
18

19. Keep Budgets & Budget Reporting Very Simple
• Account for the big ticket expenses – wages, payroll taxes,
benefits, mileage, supplies, telephone, program activities,
etc. – In my company, these manageable costs account for
85% of all expenses. The rest I put in OTHER.
• If your company has capital – buildings and vehicles –
then these are tracked separately within the budget.
• Create budget estimators for all major categories –
remembering that the WHOLE is more important than the
parts – Modify the budget quarterly or at the half year
based on performance and the WHOLE
• Simple Budgets and Budget Reports are in the best
interest of the Managers, the Board, and the Investors
19

20. Productivity Data Flows Naturally Out of
Financial Reporting & Cash Flow Charting
1) Biweekly Outstanding Accounts Receivable
Chart – charts back revenue and who is
pursuing it
20

21. Productivity Data Flows Naturally Out of
Financial Reporting & Cash Flow Charting
1) Biweekly Outstanding Accounts Receivable
Chart – charts back revenue and who is
pursuing it
2) Biweekly Billability and Overtime Chart by
Team – billable, non-billable, and overtime
stats - all data to all teams
21

22. Productivity Data Flows Naturally Out of
Financial Reporting & Cash Flow Charting
1) Biweekly Outstanding Accounts Receivable
Chart – charts back revenue and who is
pursuing it
2) Biweekly Billability and Overtime Chart by
Team – billable, non-billable, and overtime
stats - all data to all teams
3) Monthly Payables Expectation Chart – both
monthly and less frequent
22

23. Productivity Data Flows Naturally Out of
Financial Reporting & Cash Flow Charting
1) Biweekly Outstanding Accounts Receivable Chart
– charts back revenue and who is pursuing it
2) Biweekly Billability and Overtime Chart by Team
– billable, non-billable, and overtime stats - all
data to all teams
3) Monthly Payables Expectation Chart – both
monthly and less frequent
4) Biweekly Projected Revenue Chart – based on
biweekly billing
23

24. Bottom Line
1. Keep Budgets & Budget Reporting Simple
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25. Bottom Line
1. Keep Budgets & Budget Reporting Simple
2. Productivity Reports naturally flow out of
budgets and financial reporting – both tracking
outstanding receivables and biweekly
monitoring and management of expenses
25

26. Bottom Line
1. Keep Budgets & Budget Reporting Simple
2. Productivity Reports naturally flow out of
budgets and financial reporting – both tracking
outstanding receivables and biweekly
monitoring and management of expenses
3. Timely reports allow for solid management and
VERY quick modifications in a low margin
industry
26

27. Bottom Line
1. Keep Budgets & Budget Reporting Simple
2. Productivity Reports naturally flow out of budgets
and financial reporting – both tracking outstanding
receivables and biweekly monitoring and
management of expenses
3. Timely reports allow for solid management and
VERY quick modifications in a low margin industry
4. Budgets, Financial Reports, and Productivity Data
are the backbone of the front line success of any
company – So they need to be SIMPLE, FAST, AND
VERY USER FRIENDLY!!!
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28. Questions or Comments?
• Please contact David Ellison –
ellisonmt@columbus.rr.com
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• Next Webinar: June 17th P.O.L.C. Planning,
Organizing, Leading, and Controlling (The 4
Major Management Functions)
• Next Business Development Webinar:
July 8th Communicating Effectively
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