I presume that I need to use custom reports or request that new reports be included in Manager. But I am not sure the best way to go about this to achieve the desired outcome.
What I want to do is the following:
In January of each year, I want to create a report where I can record the following:
- All Income expected from April that year to March the following year
- All expenditure expected from April that year to March the following year
- Starting Bank Balance on 1st April
- Closing Bank Balance 31st March the following year
- I need to include Balance Sheet Income/Expenditure from 1st April that year to 31st March the following year
What I want to achieve is the following:
Essentially what I want to do is work out (approxiamately) how much money I will have on the 31st March of the following year so that I can do the following:
- Calculate how much I can pay myself a salary/dividend from the 1st April that year to 31st March the following year
- I want to see how much money I can spare for buying new equipment (like a new server), what my advertising budget could be or how much money I have to spend on database development for example.
- Essentially I want to ensure that I don’t run out of money before the 31st March either on the personal or business side.
Points to consider about my specific business
My clients work on an annual contract system starting from 1st April to 31st March. So by the end of January, I will know roughly what my anticipated income and expenditure will be for IT Support, Inventory Cost and Inventory Sales and for Network Cabling Installations as I now do the budgets with my clients in January for the financial year starting that April coming up.
So my business is not like a shop, when I don’t know from month to month how many customers will walk through the door. Obviously I am not going to get an exact closing balance amount for the 31st March as new work comes in during the financial year and I don’t win all the business budget for in January. However, I will be within a couple of thousand Pounds of the mark. The idea is more to get as much as possible an educated guess as to the disposable income that I will have that financial year, that I can spend on salary, dividends and investing in company assets.
Problems that I am currently encountering
I am currently using the Profit and Loss Budget Report which is really helpful.
However, I have to use an excel spreadsheet to tot up the inventory cost and inventory sales and to record each client’s IT Support income to get the totals. This is actually very time consuming. It took me hours to do this last time.
Would it be possible to create a custom report where I can add all the quotes that I have created in January to create an income/expenses report for each client for the financial year coming up? I already have all the information I need in my quotes and in the inventory Items fields. It is just a question of pulling the information from quotes and inventory items to a custom report for each client.
The Budget Report does not show starting and closing Bank Balances, nor does it show balance sheet income/expenditure. In addition, for example my accounting bill is paid in one year, but is actually split between two different financial years, as is my corporation tax - actually paid this year, but is allocated to the previous financial year. All this distorts the so called profit/loss balances and income/expenditure, making it harder to determine what actual spare cash I will have.
Would it be possible to create a custom report where I can use the Profit and Loss Budget Report (as most of the income and expenditure information is already there) and add Starting and Closing Bank Balances and move balance sheet income/expenditure to show it as money spent/received in that financial year. In addition to also remove employee expenditure (salary and petrol and dividends) as that is spare cash.
In simplest terms, I think my biggest problem is that the profit and loss budget totals bear no relationship to what I have actually got in my bank accounts at the beginning or end of a financial year because of things like dividends, corporation taxes (balance sheet accounts) as well as employee expenditure which results in very different figures from bank balances.
I don’t know if the approach that I have suggested is the best way to do it, but I assume that every company has the same problem. You want to know how much spare cash you will have after all operating expenses are deducted from income so that you can see what you have to spend on new equipment or pay a higher dividend etc.