How to Create an Office Budget

by Shemiah Williams; Updated September 26, 2017

No matter what type of business you own, you must understand what it takes to run an office and prepare a budget within a range that does not exceed the revenues of the business. A basic budget should include only expenses that are absolutely necessary to running the business. As revenues increase, you can adjust the budget accordingly.

Based on the business's annual budget, determine a reasonable total budget for the office--usually within 10 to 15 percent of the annual business budget.

Take some time to think about what is absolutely necessary to run your business--for example, utilities (electricity, telephone, Internet, water, gas) or office supplies (pens, pencils, legal pads, copy paper, stapler/staples, tape, printer ink, mailing supplies, filing supplies). Depending on your line of business, you may need specialized equipment or supplies.

Estimate the monthly average cost for all utilities and quantities of office supplies (i.e., one case of copy paper per month). Do some research on utility or office supply vendors to get the most cost-effective pricing, and ask them to send you quotes.

Multiply the cost of the items times the monthly quantity to get the total monthly cost per item. Add up the total monthly costs to get a total monthly budget. Multiply the total monthly budget by 12 (for 12 months) to get an annual office budget.

Compare the total to the original estimate (determined in Step 1). If the total is less, don't adjust the estimate--allow yourself some "wiggle room" for unanticipated or higher-than-anticipated expenses. If the total is more, take another look at your proposed budget. Consider eliminating expenses that are not absolutely necessary, decreasing the quantity of supplies needed, or doing more research on vendors.

If your total budget is not adjustable and includes only necessary expenses, adjust your estimate to your new total and try to cut in other areas to maintain a balanced budget for your business.

Tips

  • Budgets must be actively managed. Consider balancing the budget on a monthly basis. Regular monitoring of the budget prevents consistent overbudgeting and allows time to reallocate funds where necessary. Evaluate the budget on a quarterly basis to plan for large-scale adjustments or to include new items.

About the Author

Shemiah Williams has been writing for various websites since 2009 and also writes for "Parle Magazine." She holds a bachelor's degree in business and technology and a master's degree in clinical psychology. Williams serves as a subject matter expert in many areas of health, relationships and professional development.

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