What is a Profit & Loss Report with Estimate versus Budget?

Profit & Loss estimate reports are considered variance analysis reports and are often used by CFOs and Executives to compare the most likely annual results with the original plan. Some of the key functionality in this type of report is that it automatically calculates the year end estimate based on actual figures year-to-date plus forecast for the remainder of the year. For each new month the user runs the report for, the current month’s actual data will replace the forecast for that month. The report also shows the original annual budget and the variance. You find an example of this type of report below.

Purpose of Profit & Loss Estimate Reports

Companies and organizations use Profit & Loss Estimate Reports to easily compare current likely (actual plus forecast) outcome versus the original budget. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its business decisions that are tied to year end results as well as reduce the chances that managers put too much weight on a budget that by now may be far off the actual results.

Profit & Loss Estimate Report Example

Here is an example of a Profit & Loss Report with estimate (actual YTD plus forecast), budget and variance columns.

Profit & Loss Report with Estimate versus Budget Example

Profit & Loss Report with Estimate versus Budget Example

You can find hundreds of additional examples here

Who Uses This Type of Report?

The typical users of this type of report are: CFOs and Executives.

Other Reports Often Used in Conjunction with Profit & Loss Estimate Reports

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Profit & Loss Estimate Reports, along with balance sheets, cash flow reports, dashboards and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

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