October

October is a great month. Football. Cool weather. Halloween candy. It is also a good time to get  started on a couple of annual tasks...

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Budgeting

I always felt that late October was a good time to start budgeting for the next year. I have to admit that preparing a budget was interesting because you learned where the money went last year and got a chance to correct the trends. That's the expense side of the budget.

The income side of the budgeting process is like herding cats.Your plan and the actual outcome are unrelated. And worse - dangerous. We all plan to do better every year, which it fine. No problems with that. The danger is acting like it will happen when you budget the expenses. If you miss your income projections, but meet your expense projections, you just may have stepped closer to financial disaster. 

So what do I recommend? Well, since I am out of my depth here, nothing. 

But I can tell you what I do. I assume that income will be down in the coming year. Then I look at how I can squeeze any fat out of the expense side of things. If income isn't down next year, I am profitable. If income is down after all, I am as prepared as I can be.

Budgeting for Expenses
Profit Planning

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Xmas Gifts

Another task, besides Budgeting, that is timely for the end of October is planning your gift-giving to clients.

The decisions are: 

• Who gets a gift?
• How much will we spend?
• What will the gifts be?
• Who gets what?
• How will they be delivered?

So here is our process.

First, determine how much we billed each client. Those we billed over $5,000 in the first 10 months of the year get a gift. Others get a card.

Second, we budget 0.002 times the amount billed for the gift(s).

Third, we look at the number of gifts and their values and picked one or two items that seem to work. My list of past choices is below.

Fourth, bearing in mind that some authority (IRS, probably) says gifts shouldn't exceed $30, we let that inform the decision of who gets what. Often we give a client organization multiple versions of the gift, which are directed to different people that are involved in the project. Sometimes, we direct a gift to "Office Staff", too.

Fifth, we have drifted toward online gift purchasing that includes wrapping and delivery. Of course that adds cost. So it is a balancing act. 

Feel free to modify this procedure in any way you want. I don't have a clue how anyone else does this.

Gift Examples:

• Alcoholic beverages (you have to know your client!)
• Cheese, fudge or combination from the monks at Gethsemini 
• Poinsettias
• Candy from an upscale chocolatier 
• Tin or tray of seasonal cookies 
• A Big Bertha golf club (from my wife and I, delivered to the home, see limit issue above) 

One last suggestion: keep each year's list where you can find it. Not remembering what you did last year creates some unnecessary anxiety.