Entering expenses Follow

In the Expenses area of the forecast, you’ll estimate your regular monthly, yearly, and even one-time operating expenses -- rent, utilities, insurance, marketing costs, office supplies, and so on. The expenses entered here are short term; that is, they are typically used up within the period in which they are paid. For example, paying rent in January provides you with value in January but not in February or beyond. 

If your company is just getting started, you can include any one-time or short-term start-up expenses in the early months as you get up and running.

 

 

Common expenses you should not include here

There are quite a few special expenses covered elsewhere in the forecast, so you want to avoid adding any of those to the Expenses page. 

The table below indicates where to enter the most common special expenses:

Special expense Where to enter it in the forecast
Raw materials Direct costs
Manufacturing labor Direct costs
Inventory Cash flow assumptions
Salaries/personnel expenses Personnel
Loan payments/interest Financing
Major purchases (capital equipment, vehicles, long-lasting assets) Assets (or Financing if you took out a loan for a purchase)
Dividends/distributions Dividends

(For more, see What is the difference between direct costs and expenses?)

 

Adding an expense

  1. Click the Forecast tab, then click Expenses:
    forecast-menubar-new-expenses.png
  2. Click the Add Expense button:
    expense-button.png
  3. Enter a name for the expense:
    expense name.png#asset:1081
  4. Indicate what kind of expense it is:
    expense-type.png#asset:1711
    Note: Identifying your rent and marketing expenses here will allow LivePlan to properly display them in the Benchmarks and on the Dashboard.

  5. Indicate how you want to enter the expense:
    expense2.gif#asset:1082

    • If you choose Constant amount, enter the amount you'll spend on this expense per month or per year:
      expense3.gif#asset:1083
      Then indicate when the expense should begin:
      expense4.gif#asset:1085
    • If you choose Varying amounts over time, enter how much you will spend, in the months in which you'll spend it:
      expense5.gif#asset:1086
    • If you choose Percent of overall revenue, indicate the percent of your total revenue that should be allocated to this expense, and also indicate when the expense will begin:
      expense7.gif#asset:1088
    • If you choose One-time amount, indicate the amount you'll spend and when you'll spend it:
      expense6.gif#asset:1087
    • If you chose Percent of specific revenue stream, select the revenue stream that the expense is related to. Indicate the percentage of this revenue stream that should be allocated for this expense:
      expense8.gif#asset:1089
      Then, indicate when the expense will start.
  6. Click Save & Close.

 

Editing or deleting an expense

To edit or delete expense, click on it in the Expenses table:
edit-expense.jpg#asset:1712

  • To edit the expense, make any desired changes, and click Save & Close when you're finished. For more details, see How do I edit or delete forecast items?
  • To delete the expense, locate the trash can icon in the lower left corner of the overlay. Click on it, and then click Confirm:
    deletedividend3.png#asset:1043

 

Where does this entry appear in the financial statements?

Your expense entries appear in an itemized list in the Profit and Loss table as Operating Expenses:

expenses-pandl.png

The expenses do calculate into the Balance Sheet and Cash Flow table, but not explicitly. Instead, your expenses are used to calculate your available cash, which appears in the Assets portion of the Balance Sheet:

expenses-balancesheet.png

In the Cash Flow, your expense entries calculate into the lines shown below:

expenses-cashflow.png

 

More on forecasting:

Preparing a forecast

Was this article helpful?
3 out of 3 found this helpful
Have more questions? Submit a request

Comments

0 comments

Article is closed for comments.