You are an expert at running the manufacturing side of your company, but estimating budgets for business expenses and production costs may not come as naturally. Unfortunately, inadequate planning for these costs can cause manufacturers to make budget-blowing mistakes; on the other hand, a solid understanding of costs at the start of annual planning can lead to fiscal-year success.
Costs for manufacturing companies come in two main categories: business costs and manufacturing costs. Here’s a look at some common budget mistakes in both areas, along with ideas for avoiding them.
Are you tasked with estimating budget line items, such as advertising, insurance, hospitality, training, banking fees, taxes, legal advice and accounting services? Watch for these potential issues:
Two key areas may cause you to underestimate your budget:
Control the Optimism and Get Support
Planning the year’s budget is a tricky process. Being realistic, or even considering a worst-case scenario, will help you avoid surprise expenses. Some experts say to build in a contingency fund of as much as 20% of revenue. To keep your budget in tune and look for money leaks, consult your CPA and tax advisor regularly. And don’t forget to turn to your banker, a key resource for sharing ways to safeguard cash flow, operate business processes and plan for your future.
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Maintenance Assistant, https://www.maintenanceassistant.com/predictive-maintenance/?gclid=CPWK8pGxss8CFYQAaQodL64OQw
Dave Lechleitner, “5 Common and Costly Manufacturing Mistakes Made by Job Shops,” Job Shop Management Blog, ExactJobBoss.
Brian Sutter, “10 Hidden Costs Of Running a Small Business,” Buzz, Wasp Barcode Technologies, http://www.waspbarcode.com/buzz/10-hidden-costs-running-small-business/
Mitchell Holt, “Common Overlooked Expenses in Business,” Houston Chronicle,
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