Yearly Budget Templates in Excel which keep your business on Track

A number of business owners start their operations with enthusiasm and optimism. When managing a business it is not unusual to get bogged down in the day to day matters; keeping track of invoices, getting customer traffic, etc. and risk missing the bigger picture of what makes a business successful.

Budgeting, aside from good business practice, can form a valuable tool for achieving ongoing financial success. However, creating a budget is a daunting task and may seem like treading on water.

What can help here is to use a budget template in excel to work with a budgeting structure. There are numerous yearly budget template resources available online. Some resources charge a fee and others offer a free budget planner template as well.

What is Budgeting?

Whether you are creating your personal budget planner from scratch or searching for a yearly budget template for a business, let us first understand what budgeting is.

  • The famous American author and motivational speaker John Maxwell said: “A budget is telling your money where to go, instead of wondering where it went”.  
  • Budgeting is the process of developing a plan to spend money.  It is composed of a list of all projected income and expenses for a set period of time.
  • It is made for anyone that makes and spends money. It can be for an individual, a group of people like a family, business, an entire country and its government, and multinational companies.
  • It can cover any time frame- short term budgets are 1 to 2 years and long-term budgets cover 3 to 10 years.

Most budgets will cover only yearly periods as very often it is difficult to derive reliable estimations more into the future. Therefore, companies and into a yearly budgeting process where they define their planned income and costs to be spent. The easiest way to do this is to use a yearly budget template in Excel.

Free Budget Planner Templates

Check out some of the free budget planner templates which can be helpful to plan the financial future of your business.

Types of Budget to consider for your yearly budget template

Contrary to what most people assume, a budget is not “a one size fits all” or “cookie-cutter” process. If you are looking for a yearly budget template, there exists actually various types of budgets. Let’s shortly review the most common budgeting methods.

Master Budget Templates

A master budget is a comprehensive and all-encompassing budget for the whole business. It’s the total of all individual budgets from various departments in the company. This type of budget has two main parts:

  • Operating budget: Related to the day to day business activities of the company and tracks the revenue earned and expenses incurred. This follows a very practical approach to budgeting and aims to obtain an understanding of how much profit has been made and why e.g.
    • Sales budget
    • Production budget
    • Overhead budget
    • Selling & administrative expense budget
  • Financial budget: Presents a company’s expected financial position and paints a picture of the company’s assets, cash flow, income, and expenses for the future. This type of budget is a more formal approach which takes a bit more time to prepare but normally is more comprehensive as the operating budget as the budget’s focus is to understand cash flow and not solely profits. This type of budget planner template is composed of:
    • Cash flow budget
    • Budgeted balance sheet
    • Capital expenditure CAPEX budget

Both types can also be combined in a yearly budget template in Excel. It is widely used as it helps managers see the “bigger picture” and allows them to plan in advance for the overall company and their cash flow needs. Such budgets normally start with revenues and expenses incurred as of last year and then become adjusted for what the management believes will affect the company in the next year.

Zero-based Budget (ZBB)

Developed in the 1970s by Peter Pyhrr, a manager at American Tech firm Texas Instruments. This type of budget starts at “zero” for each period and ignores the previous year’s spending balance. Each cost and expense must be justified and newly examined if these are essential to the needs of the business. A yearly budget template in Excel offers the framework to prepare such a budget but is set to zero at the start. It allows companies to look at each department and their needs bottom-up and makes sure it has the correct budget needed for operations. A solid budget template in Excel also helps identify and evaluate redundant (wasteful) spending.

Static Budget

The static (or fixed) Budget is a type of budget that remains unchanged and does not consider any change in the level of activity or volume, revenue, and expenses. A static budget is planned ahead of time usually a year in advance and based upon assumptions and projections on future actual activity. This is the exact opposite of a flexible budget. A yearly budget template in Excel will be most useful for analyzing variances (in dollar amount and percentage) in the business and identifies whether the management is over or under spending the budget.

Flexible Budget

Also called a variable budget. This type of budget adjusts or “flexes” with any change in the level of activity or volume, revenue, and expenses. A flexible budget is modified during the budget period for actual sales levels, changes in production costs and other changes in business operations. A yearly budget template in Excel gives managers the ability to keep track of all levels of change and to adapt to these changes such as implement better control costs and adjusting profit margins.

Rolling Budget

Also known as a continuous budget. When the budget period expires, the earlier period is updated or “rolled” to the new and current period. This type of budget allows the company to have a fixed and constant time frame. For example, a company’s budget covers a yearly or 12-month time from Jan to Dec 2019, when the month of January 2019 ends, you add Jan of the following year to the budget to maintain the 12-month period (Feb 2019 to Jan 2020). A yearly budget template in Excel will make the updating process easier and less time-consuming. This also gives managers an accurate representation of the state of the business.

Personal Budget

Also called a Home Budget. Just as small businesses and large corporations develop and plan budgets, a household or individual is no exception. A personal budget allocates personal income towards expenses, savings, and debt repayment. Planning a budget does not have to be too complicated, choosing an easy to use Personal Monthly Budget in Excel will give you a great start to keep track of your money.

Budget Envelope System

This type of budget is more relevant to personal finances. At each payday, you place a certain amount of cash into envelopes which you allot for expense categories. Essentially you are matching your income to your expenses. This can be managed with free budget planner templates or simply by setting up regular payment orders that allocate cash amounts as per pre-specified days. This type is suitable if you want to be completely in control of your money as it allows you to micromanage your expenses.

Yearly Budget Planner Templates

Numerous free budget planner templates are available for different types of budget such as:

Optimizing your yearly budget template in Excel

A budget at its simplest form is an action plan for your business, it helps businesses allocate resources properly, evaluate its performance, and develop plans for future goals. However, budget planning as well as implementing it is a big task that is time-consuming and requires a manager’s full attention.  You can make the most of the budget by using a yearly budget template in Excel and by carefully evaluating which types of budgets might be most suitable for your company.

Evaluate business performance using a flexible yearly budget template, you can track the actual performance (output) of your business. A budget template in Excel gives a manager the ability to adjust costs and margins by easily recalculating production and overhead costs based on actual sales data or units sold. Which in turn allows managers to react to opportunities or avoid losses.

Identify variances between actual vs. budget by using both flexible and static yearly budget template. Comparing both budget templates in Excel, a manager can identify any variances (or differences) between the forecasted spending and the actual spending of the company. A manager can also use a Budget vs Actual Excel Template to analyze these differences.

Prepare the budgeting process by using a master budget template in Excel which offers details and insights into the areas relevant to the finances of your business. Large corporations have different departments each with their own budget plan. Keeping track and evaluating results can be difficult. A master budget template in Excel presents the vital link between these departments- its sales, production, and costs. It also presents how all the departments work together or coordinate with each other to achieve company goals.

Why not try to identify unnecessary costs by using a zero-based yearly budget template in Excel. A Zero-based budget is simple as it entirely starts with no reference to prior budget or period. All costs and expenses are evaluated, analyzed and scrutinized before approval.  The zero-based budget template in Excel gives managers control over every cost or expense which improves business operations and efficiency.

Need to adjust or tailor-made your budget? Check out these financial modeling services:

Was this helpful?