A budget gives you as a business owner a complete overview of your expected income and expenses for a given future period – typically the next 12 months. You could say it's like looking into the future and guessing the company's future financial situation.

We recommend creating a budget to ensure that the company continuously meets the financial expectations and goals that have been set, and to get a sense of where in the company things are going well and where they might not be going so well.

For example, you can continuously compare your expenses against your budget and thus check yourself to ensure that you are not spending more money than the company can afford.

You already know this from when you report to SKAT. Here, you tell SKAT what you expect to earn in the next 12 months. If you have a sole proprietorship or a small privately-owned business, you create a form of budget in the information form to SKAT.

It is not a requirement to create a budget when starting your business, but it is always recommended. Most companies do have a budget for their expected finances, and it is often a requirement from the bank – it is at Lunar – and other stakeholders of the company.

You create a budget in a spreadsheet. This is the easiest for you when creating it, and it is the easiest for us at Lunar when we review it. If you do not have Microsoft Office to create it, you can always use Google Sheets or Numbers from Apple.

We have created a budget template that you can download and fill out here.