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Budget Planning Checklist
Revenue Forecasting
Review previous year's revenue to establish a baseline
Analyze market trends and potential impacts on business sectors served by the firm
Consult with practice group leaders to estimate future workloads and revenue
Expense Budgeting
Itemize fixed overhead costs such as rent, utilities, insurance, and technology subscriptions
Plan for variable expenses including marketing, travel, and client entertainment
Estimate personnel costs, including salaries, benefits, bonuses, and training expenses
Capital Expenditures
Identify necessary long-term investments such as new technology, office space, or furniture
Prioritize capital projects by potential return on investment and alignment with strategic goals
Plan for financing of capital expenditures, whether through reserves, financing, or capital calls
Cash Flow Management
Develop a monthly cash flow projection to manage inflows and outflows effectively
Set aside reserves for anticipated tax liabilities and other irregular but predictable expenses
Monitor accounts receivable closely and establish policies to minimize late payments
Risk Assessment
Analyze potential legal changes that could affect firm operations or client demand
Evaluate the firm's insurance coverage to ensure adequate protection against identified risks
Consider setting aside funds for unexpected events or economic downturns
Performance Metrics
Establish financial key performance indicators (KPIs) to track the firm's financial health
Regularly compare actual performance against budgeted figures
Adjust the budget as needed based on performance reviews and changing circumstances
