Help: Proft & Loss Statement

[Hot Lips]

In between posts I'm drafting a 2006 profit & loss statement. I'm wondering if I should be as accurate as possible on my numbers or if it's better to over estimate expenses and under estimate revenue .... or the opposite.

Any business finance guru's in da hizzouse?

[TuNeRsHaRk]

whoa


i wish i knew

[Violet Fashion by Mindy]

Be as accurate as possible.

However you could say the new car you purchased is a "business expense"

[askDNA]

http://billjames.org/billjames.org%20Political%20Images/Brooks%20-%20Rhino%20-%203-2003%20CMS%20&%20Enron%20a.jpg

[Gremlin29]

You shouldn't be estimating revenue or expenses, they are what they are. Besides, how are you getting the info into your P&L without a balance sheet anyway?

[Hot Lips]

I'm using this years monthly statements, contract agreements, etc to do projections for next year. My boss will use it in her budget report for next year. It not a true profit and loss statement, just a projection of what we expect for next year. Last year my boss did the projections for this year and looking back they are waaaaaaaaaaay off this years actual numbers. So I'm wondering if that was intentional or if she just had no clue.

I'm just trying to make my figures are realistic as possible at this point. Adding estimates for new staff members, revenue/expenses for projects we are picking up next year, sales, commissions, etc.

It's making my wee brain hurt.

[Flagg]

In between posts I'm drafting a 2006 profit & loss statement. I'm wondering if I should be as accurate as possible on my numbers or if it's better to over estimate expenses and under estimate revenue .... or the opposite.

Any business finance guru's in da hizzouse?

In my experience with P&Ls it's best to stick with reality.

Use HONEST numbers, for example....if AVERAGE revenue growth is 15% per annum....and there are no EXTRAORDINARY changes expected in your marketplace for the following year...it's best to stick with the 15%.

Projection numbers need to be achievable.....think about how the projections will be perceived by document "customers" when the year in question is completed.

Did you beat the numbers by a bit? Credibility and morale booster

Or did you miss by a mile? Credibility and morale killer

If your boss pressures you to pimp the numbers and you voluntarily agree...remember your name(and your credibility) will be associated with the
dog and pony show.

If possible, try and delegate as many of the distinct line items as possible to relevant "owners". Have them provide aggressive BUT achievable numbers...and document their involvement.

Ths will allow you to put other peoples asses on the line while simealtaneously covering yours.

[Hot Lips]

Thanks Flagg. :hug: I was worried I was doing something wrong when I saw how different her proj numbers were to this years actuals.

I've been looking at the monthly actuals, contracts, and our plans for next year all night. I think I've come up with some reasonable estimates for next year.

I'll give her my estimates (via email) and she can do what she wants with them from there. I'll still have my original records if she plays any games with the numbers.

[Fintin]

do we have to mention enron....dont cook the books...it might make people trigger happy....

[Violet Fashion by Mindy]

Cooking the books is makes it all interesting.

Minardiau used to be a Finance Officer

[Hot Lips]

We're not hiding profits that have already been made from share holders to line our own pockets. Sheesh!

We are making estimates on next year in order to get budget monies approved. I know some folks like to over estimate so that they'll get a bigger budget. I suppose the theory is..... better to have too much and not spend it all then to have too little and run out before the year is over. Easier to get money at the beginning of the year than 1/2 way through.

[Violet Fashion by Mindy]

Overestimate the profits then. Before you do buy stock. Announce it to Wall Street. Watch the share price go sky high.

Then sell up and downgrade the forecast.

[Hot Lips]

I'm a blonde you know. *twirling hair round finger*

[Violet Fashion by Mindy]

Well that explains an awful lot.

[FallenAngel]

Cooking the books is makes it all interesting.

Minardiau used to be a Finance Officer

operative term: "used to be" ;)

[Violet Fashion by Mindy]

Hey man I was never given the ass because of creative bookeeping lets put it that way.

[Gremlin29]

Sounds like your actually doing an FPO for next year in which case it's all voodoo anyway. Make your projections to fall in line with the companies expectations (usually a a rise in revenue). Good luck, I have an FPO due end of next month.