Build your budget on one page and see every month whether it holds

The steps in the video

The figures shown come from a fictitious example.

1. One workbook, six tabsThe first tab tells you what to fill in and in what order. You build the budget once, then enter actuals every month.
2. Set the frame: three entriesEnter the company, the first month of the year and the unit. The twelve months date themselves.
3. Sales, month by monthOne row per sales line, one amount per month. The August dip shows at once.
4. Variable costs: one rateOne percentage of revenue per line. The margin ratio follows: 82% in the example.
5. Fixed costs, in the right monthEach item in the month it falls due: the December bonus, the year-end tax, the March trade fair.
6. Profit, month by monthThe year ends at €66,540, but July and August are in the red. Better to know it in January.
7. Five key figuresRevenue, margin ratio, fixed costs, profit and break-even, always in the same place.
8. Actuals: one column per monthOnce the month is closed, copy the actual amount of each line. Allow a quarter of an hour.
9. You set the alert thresholdMore than 10% and more than €1,000 of variance: only those lines raise an alert.
10. The month’s variances, plainlyAugust projects: €2,500 below budget, that is 25%. The “Unfavourable” alert lights up.
11. Year to date and year endAt the end of August, profit to date stands at -€24,400. If the rest holds to budget, the year ends at €13,720.
12. The monthly review in one lineRevenue to date, variance, profit, forecast and number of alerts.
13. Cautious, central, ambitiousThe cautious case loses €50,572 and needs €42,653 of cash. Better to learn it now.
14. The lowest cash pointMonth by month, you see when cash hits bottom. In the cautious case, it is October.
15. Break-even, and when€1,100,854 of sales to cover fixed costs, reached in early December. The margin of safety is 7%.
16. Reached in DecemberCumulative sales only pass break-even in December. One average month of sales less, and the year makes a loss.