New Business Expensing
If you’re a new business owner, now that you’ve got that expense template in front of you, the first thing you’ll notice is an area for cash in bank and then revenues made. Because you are new, you will be able to enter your bank account balances, but what about revenues? Use your sales forecast numbers as expected revenues before starting on the expense portion of the template.
Once you’re bank balance and revenues are entered, take a look at each expense category. Because all businesses are different you can add a line item or delete line items that aren’t pertinent to your type of business.
Next, start predicting what you expect you’ll spend on expenses each month. Some items such as rent, insurance, payroll, and inventory are easier to determine than others. You probably know how much your rent is each month, what you’ve promised to pay employees, and how much you spent on opening inventory. Other expense items such as advertising and utilities may take some research on your part. For utilities, call the utility company and get a breakdown on what the average utilities were in the past for your building. For items like advertising and credit card machine expenses, you may have to predict what you plan on spending.
Once you’ve entered all you expected expenses on the business expense template, it will automatically calculate your cash flow and if you’ve overspent or are in line with expenses. By looking at the total picture, you can then decide where you need to cut expenses. This is also a good template to utilize to compare predictions to actuals once you have some business history behind you.
Image Credit: Expense Sheet (http://www.flickr.com/photos/pshegubj/4626928612/sizes/s/)