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Profit & Loss Report with Estimate versus Budget Example

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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

Monthly Profit & Loss Report with Budget and Forecast Variances Example

What is a Monthly Profit & Loss Report with Budget and Forecast Variances?

Monthly Profit & Loss Variance Reports are considered core financial statements and are often used by executives and financial managers to review month-end results. Key functionality in this type of report provides actual to budget and forecast comparisons for the current period. It also shows the full year budget versus the revised forecast. Rows are grouped by department and can be expanded to view the individual accounts. You will find an example of this type of report below.

Purpose of Profit & Loss Reports with Budget and Forecast Variances

Companies and organizations use Profit & Loss Reports with Budget and Forecast Variances to easily view actual revenue, expense and profit performance compared to both the annual budget and the forecast. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its monthly and year-end tracking against plan, as well as, reduce the chance that managers lose sight of gaps between current performance versus current and year-end budgets and forecasts.

Profit & Loss Reports with Budget and Forecast Variance Example

Here is an example of a Profit & Loss Report with variances against budget and forecast.

Monthly Profit & Loss Report with Budget and Forecast Variances Example

Monthly Profit & Loss Report with Budget and Forecast Variances Example

You can find hundreds of additional examples here.

Who Uses This Type of Report?

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

Other Reports Often Used in Conjunction with Profit & Loss Reports with Budget and Forecast Variances

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Profit & Loss Reports with Budget and Forecast Variances, along with balance sheets, cash flow reports 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

Monthly Profit & Loss Forecast Report Example

What is a Monthly Profit & Loss Forecast Report?

Profit & Loss Forecasts are considered one of the most popular type of planning models and are used by CFOs and planning managers to help plan any activity that will be driven by revenues, expenses and profitability. One key functionality in this type of forecast template can provide a month by month view of revenues and expenses at a GL account level. In the columns it automatically pulls actual figures year-to-date and then displays forecast for the remaining months. This P&L forecast is typically linked to the Balance Sheet and together these two templates feed the Cash Flow Forecast. You will find an example of this type of forecast template below.

Purpose of Profit & Loss Forecast Models

Companies and organizations use Profit & Loss Forecast Models to provide executives and managers with a dynamic planning tool that speeds up and improves decisions related to revenues, expenses and profitability. When used as part of good business practices in a Financial Planning & Analysis (FP&A) and Accounting Department, a company can improve its strategic and operating decisions as well as mitigate the risk that lack of profitability and related overspending occur.

Profit & Loss Forecast Model Example

Here is an example of a Monthly Profit & Loss Forecast Report with actual data year-to-date and forecast for the rest of the year.

Monthly Profit & Loss Forecast Report Example

Monthly Profit & Loss Forecast Report Example

You can find hundreds of additional examples here.

Who Uses This Type of Forecast Template?

The typical users of this type of forecast template are: CFOS, Controllers and Planning Managers.

Other Forecast Templates Often Used in Conjunction with Profit & Loss Forecast Models

Progressive Financial Planning & Analysis (FP&A) and Accounting Departments sometimes use several different Profit & Loss Forecast Models, along with balance sheet and cash flow forecasts 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, 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

Monthly Balance Sheet Forecast Report Example

What is a Monthly Balance Sheet Forecast Report?

Balance Sheet Forecasts are considered key planning tools and are used by CFOs and planning managers to estimate liability and asset components as well as to drive the cash flow forecast. A key functionality in this type of forecast template can pull Net Income and Accumulated Depreciation data from the Profit & Loss forecast and feed it into the Cash Flow forecast. It displays monthly historical data up to the current period, and forecast data for the remaining months of the year. Part of the logic provide an estimate of the timing for Receivables and Payables. The monthly detail provides managers with insights such as important upward and downward trends. You will find an example of this type of forecast template below.

Purpose of Balance Sheet Forecast Models

Companies and organizations use Balance Sheet Forecast Models to drive the Cash Flow forecast and to help managers make timely decisions based on the resulting insights. When used as part of good business practices in a Financial Planning & Analysis (FP&A) and Accounting Department, a company can improve its decisions related to assets, liabilities and cash flow, as well as reduce the risk that it cannot meet its financial obligations.

Balance Sheet Forecast Model Example

Here is an example of a Monthly Balance Sheet Forecast Report with actual data year-to-date and forecast for the rest of the year.

Monthly Balance Sheet Forecast Report Example

Monthly Balance Sheet Forecast Report Example

You can find hundreds of additional examples here.

Who Uses This Type of Forecast Template?

The typical users of this type of forecast template are: CFOS, Controllers and Planning Managers.

Other Forecast Templates Often Used in Conjunction with Balance Sheet Forecast Models

Progressive Financial Planning & Analysis (FP&A) and Accounting Departments sometimes use several different Balance Sheet Forecast Models, along with profit & loss and cash flow forecasts 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, 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

Monthly Cash Flow Forecast Model Example

What is a Monthly Cash Flow Forecast Model?

Cash Flow Forecast Models are considered essential planning tools and are used by CFOs and planning managers to ensure that its sources and uses of funds provide the necessary liquidity for the coming months’ operations. Some key functionality in this type of forecast template will pull data from Profit & Loss and Balance Sheet accounts, then display monthly historical data YTD and forecast for the remaining periods of the year. Part of the logic from underlying asset and liability accounts offers a prediction of the timing for Receivables and Payables. The monthly detail provides managers with insights such as upward and downward trends in the cash flow. You will find an example of this type of forecast template below.

Purpose of Cash Flow Forecast Models

Companies and organizations use Cash Flow Forecast Models to ensure that the business has the cash required to fund its planned activities for the months ahead. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its liquidity as well as reduce the risk of experiencing cash flow issues.

Cash Flow Forecast Model Example

Here is an example of a Monthly Cash Flow Forecast Report with actual data year-to-date and forecast for the rest of the year.

Monthly Cash Flow Forecast Model Example

Monthly Cash Flow Forecast Model Example

You can find hundreds of additional examples here.

Who Uses This Type of Forecast Template?

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

Other Forecast Templates Often Used in Conjunction with Cash Flow Forecast Models

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Cash Flow Forecast Models, along with profit & loss and balance sheet forecasts 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, 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

Profit & Loss Budget Analysis Report Example

What is a Profit & Loss Budget Analysis Report?

P&L Budget Reports are considered budget analysis tools and are used by budget managers and executives to review the final budget at a summary level. A key functionality in this type of management report will compare the budget to actual year-to-date numbers plus forecast for the rest of the year. It also shows variances between the budget and last year’s actual results. While the top of the report provides graphical summary metrics, the user can also drill down on any number in the report to see transactional budget or actual data. You will find an example of this type of management report below.

Purpose of Budget Analysis Reports

Companies and organizations use Budget Analysis Reports to increase budget accuracy and also to review multiple different budget scenarios to determine the most likely outcome. When used as part of good business practices in a Financial Planning & Analysis (FP&A) Department, a company can improve its ability to produce optimal budgets as well as reduce the risk that avoidable budget variances occur.

Budget Analysis Report Example

Here is an example of Profit & Loss Budget Report with charts and variance analysis.

Profit & Loss Budget Analysis Report Example

Profit & Loss Budget Analysis Report Example

You can find hundreds of additional examples here.

Who Uses This Type of Management Report?

The typical users of this type of management report are: Executives and Budget Managers.

Other Management Reports Often Used in Conjunction with Budget Analysis Reports

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Budget Analysis Reports, along with balance sheet and cash flow budget analysis reports, departmental detail 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, 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

liquidityriskanalysis

Nobody likes a budget that is far off target, especially when it could result in a liquidity crisis. Luckily, most companies rarely have to experience such a stressful event. Although, in a turbulent economy where interest rates and stock indexes move up and down like yo-yos and news about corporate layoffs are part of daily news headlines, strong financial clarity does not seem like a bad idea.

So, what does a cash flow forecast mean to most people?

Here is a definition: A cash flow forecast is a plan that shows how much money a business expects to receive in, and pay out, over a given period of time. 

Based on the definition above, it seems logical that all businesses should have a cash flow forecast perfectly ingrained in their corporate processes, but is that the reality? Let’s take a closer look at this.

Are All Businesses Doing Cash Flow Forecasting?

As much as it seems to make perfect sense to have a good estimate of your future cash outflows and inflows, many companies never get around to doing it. This is especially true in small and mid-sized businesses. Some of the reasons for the lack of cash flow forecasting models are the following:

  • The finance staff don’t have time to prepare it
  • Lack of tools that automate cash flow forecasting
  • Complexity in creating a good cash flow model
  • Lack of accuracy in past models leading to reduced appetite to repeat it
  • Other business tasks or fires keep executives focused in other areas
  • The financial planning team is exhausted after then annual budget process with no time or motivation to re-forecast the budget during the year

Regardless of the reason for not doing a cash flow forecast, healthy cash flow is the lifeblood of all businesses, so there is no lack of motivation.

Let’s look at the potential benefits of accurate cash flow forecasting.

Why Do Companies Want to Project Their Future Cash Outflows and Inflows?

Most executives know they would sleep better at night if they had a mechanism that fairly accurately could tell them if the liquidity of their business is healthy or not in the months ahead.

Below is an example of a report using simple color indicators and charts to help managers analyze the company’s projected cash position based on underlying cash flow forecast.

liquidity risk analysis

There are several very logical reasons why a company can benefit from regular cash flow forecasts, including:

  1. Reduce the risk of insolvency – by having a clear idea of any upcoming liquidity issues, management can react early and avoid drama and stress
  2. Move faster on investment opportunities – if you, thanks to a cash flow forecast, early on know that the business will be flush with cash in the months ahead, you can start planning acquisitions, down payment of high interest debt, purchases of strategic capital assets, etc.
  3. Satisfy bankers to enable debt financing or other bank-backed financial transactions

In other words, solid cash flow forecasts can be of tremendous value to a management team. However, if many financial teams dread the additional work of doing planning and performing a cash flow analysis, how can companies still get it done?

How to Automate Cash Flow Forecasts?

As in many other cases, technology can help automate laborious tasks. In the case of cash flow forecasting, there is a cloud software category often referred to as Corporate Performance Management (CPM) solutions that includes vendors such as Adaptive Insights, Centage and Solver that specialize in planning, budgeting and forecasting.

Benefits of CPM tools include scenario forecasting to predict “great”, “good” and “bad” scenarios so managers can plan accordingly. In other cases, CPM solutions provide entire driver-based forecast processes. Driver-based means that the forecast includes assumptions that help automate and simplify creation of sales, payroll, expenses, balance sheet and cash flow forecasts.

Sometimes managers don’t have the time or the need for a full forecast to analyze projected liquidity, in which case they can use simulation models to quickly adjust elements of their cash outflows and inflows to see the impact on the cash position as seen in this example:

cashflowanalysis

Most executives would agree that accurate cash flow forecasts provide numerous benefits to their business. During economic turmoil cash flow forecasts can help lower the risk of running into liquidity problems and increasing the chance to be ready to jump on investment opportunities. Regardless of the motivation, there are good tools available to help automate and simplify such financial planning processes.

At Solver, we offer Corporate Performance Management Solutions that help you establish cash flow forecasts and analyses and prepare for uncertain times. Contact one of our expert team members to learn how we can help you improve your cash flow processes.

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