In an earlier post (Budgeting for Small Business, Introduction #2), I called this the “Interest and Tax Budget”. The more appropriate name for this budget is the “Non-Production and Tax Budget”. This budget includes any revenue and expense that is not directly tied to the operations of your company as well as an estimate of the taxes your company will pay during the budget period.
Non-production revenues and expenses include legal judgments that you expect to win or lose, interest income or loss from investments, etc. Small businesses usually have very few non-production revenues and expenses, so they are fairly easy to identify. However, these items affect the net income that is used to calculate your tax obligation.
Comments