Our most popular customizable spreadsheet model is the Financial Plan for a Business. It includes all the common features of a financial plan, and some not-so-common features. It exploits our customization capabilities to make simple financial plans easy and complex financial plans almost as easy.
The core common to most financial plans consists of the financial statements: the income statement, balance sheet, cash flow statement, and the financial ratio report. Our financial plan backs up the financial statements with detailed reports in nine sectors of the plan:
- Five reports each on one section of the income statement: sales, cost of goods, operating expense, a separate report on employment, financial and tax expense.
- Three reports on the main sections of the balance sheet: short and long-term assets, short and long-term liabilities, and owners’ equity
- Valuation of the business.
In all of our customizable templates, the most basic customizations you can make are to specify the time series (start date, time range, time grain, rollup time grains), and the number and names of items (and optional hierarchy) in each dimension; and to include or exclude optional features.
Many optional features enable you to customize the plan to have the features you want, while excluding other features that you don’t need. For example, the detailed model for sales revenue includes sales units, list prices and average discount percentages, and geographic locations / sales channels. The sales model has some optional features that you can include or exclude.
- Annual product/customer support contracts, with option to defer revenue over the one-year term of the support agreement. These are very common in many hardware, software and service businesses. You can specify the term of support contracts (usually one year). Revenue and expense from an annual service contract are spread across all the time periods in the term of service.
- Sales contracts that are unrelated to product sales (for example R&D contracts or support contracts not directly tied to regular product sales). You can specify types of contracts and the duration for each type of contract.
- Sales funnel with lead qualification criteria and backlog. This feature is particularly valuable for businesses with long sales cycles, in which the v0lume and quality of opportunities in the sales funnel is a good predictor of future sales.
- Sales scenarios. This feature enables you to include high, medium and low sales scenarios in one plan, and to switch between the scenarios by changing one number.
- Deferred revenue in the form of sales that are unrelated to sales of products and product support. You can specify several types of sales transactions and the time term over which revenue and associated direct expense are spread (accrued).
- Sales returns and return expense. Sales returns and associated expenses are important for some businesses and negligible for others.
- Installed base. Businesses that sell durable products and that derive a substantial share of their revenue from continuing support contracts find this feature quite necessary.
Here is a summary of selected features in the remaining sector models.
- Cost of goods: optional production learning effects that reduce cost of goods. Optional detailed direct labor model includes labor cost per unit, hours per unit, labor cost per hour headcount, hours per headcount, labor utilization rate, overtime pay, all segmented by direct labor job level.
- Production and finished goods inventory. Also inventory stocks for raw materials and direct supplies
- Operating expense: departments, department-specific expense accounts, facilities expense, G&A expense, marketing programs expenses. Some expense types can either be specified directly by you, or you can use the built-in model to compute expenses based on revenue with scaling effects (economies of scale).
- Employment model: job levels, employee headcount, pay levels, bonuses, and employee benefits and payroll taxes, recruiting expense (by department, job level, with turnover, and policies regarding how much you retain recruiters and their fees).
- Asset-related options include short-term assets (cash, receivables, inventory of finished goods and supplies) and long-term assets including purchases and depreciation.
- Tagged assets are major assets that are individually tracked and depreciated.
- Untagged assets are numerous lower-value assets (such as PCs and office furniture) that are tracked by asset class and depreciated as a group
- Liabilities include long-term debt, corporate bonds, and leases.
Because you can turn on or off advanced features with a mouse click in our template customizer, the plan can offer you advanced features that are important to some users and not needed by other users. Examples of features that can be valuable but are optional in most plans include:
- Recruiting expense is particularly important in firms with significant turnover, or that find it hard to get the combination of skills and experience they need.
- Production learning curve is particularly important to firms with rapidly evolving products or production processes. Such firms often use the planning assumption that production cost per unit declines as cumulative production volume increases over time, as described by certain non-linear trends.
- Capitalized development expense helps companies whose investment in development of new products and technologies is a large share of the value of the firm; and this feature enables the plan to reflect that for managers and investors.
The Financial Plan for a Business comes in four versions of increasing size and feature richness: Light, Standard, Advanced, and Advanced Extra-Large. You can get a thorough and up-to-date summary of all the optional features in the plan from our website at http://templates.modelsheetsoft.com/modelsheettemplates/financial-plan-templates-version-comparison.aspx . Our technology enables us to maintain these versions as one model. (Most of our customizable templates come in families, each of which arises from a common ModelSheet model.) This architecture increases the reliability of the entire line of templates, because we need make changes only once for each family of customizable templates. Many users tell us that this kind of comprehensive plan is not feasible to build and reliably maintain in spreadsheets by conventional methods.
The Financial Plan for a Business is the foundation a line of more specialized financial plans.
- Financial Plan for Professional Service Businesses
- Financial Plan for Medical Services Businesses
- Financial Plan for a Small Business
Our financial plan models aim to provide enough optional features that they cover most product and service-related businesses. If you need some features that are not included in the current models, please contact us, and we will consider adding the features you need.
Other more specialized financial plan models are planned. If you need a feature that is not included in our financial plan templates, we would like to hear from you.
See the overview, view a video introduction, or download the user guide.
