Do I Need A Budget? (and How to Create One That Works)

As a bookkeeper working with small businesses across Melbourne for many years now, one question I hear often is: “Do I really need a budget?”

The short answer? Yes. (ABSOLUTELY YES)

Without a budget, you’re essentially running your business blind. You might be working hard, but without a plan, it’s easy to get off course. A budget isn’t just about numbers – it’s a roadmap. It gives you control, clarity and confidence to steer your business in the direction you want your life to go.

New to budgeting? Here’s how to get started.

Whether it’s your first time setting a budget or your tenth, these five steps will help you build a strong financial foundation:

Start where you are.


It doesn’t need to be perfect – just start. A budget gives you visibility over your cash flow, highlights areas to reduce costs and helps you focus on profit. It’s one of the most powerful tools for improving your financial position.

Learn from the past.

Review your figures from the past 12–24 months. What are the patterns in revenue and expenses? Are there seasonal spikes? Cost blowouts? Use this data to set realistic expectations for the future and make smarter decisions.

Use your profit and loss.

Your P&L report is your best friend when budgeting. It shows exactly what’s coming in and what’s going out. This gives you a clear picture of where you stand – and where you can go.

Think big, then zoom in.

What’s your vision for the next 1, 3, or 5 years? Write it down. Then work backwards. Break that big-picture goal into monthly targets. Monthly budgeting helps you stay nimble and avoids overestimating income or underspending in critical areas.

Make it part of your system.

Once your budget is ready, upload it into your accounting software (like Xero). Seeing your budget alongside your actuals keeps you accountable and gives you a constant pulse-check on your business health.

Need help building a smart budget?

At Sum and Substance, we help business owners just like you take control of their numbers – so they can plan ahead with confidence. Whether you want help reviewing last year’s data or mapping out a fresh financial plan, we’re here to support you every step of the way.

Let’s make this next financial year your most successful yet.