Entering expenses

In this article

In the Expenses section 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 Revenue stream > Cost of sales
Manufacturing labor Revenue stream > Cost of sales
Inventory Revenue stream
Salaries/personnel expenses Personnel
Loan payments/interest Working capital > Funding
Major purchases (capital equipment, vehicles, long-lasting assets) Working capital > Assets (or Financing if you took out a loan for a purchase)
Dividends/distributions Working capital > Dividends

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

Adding an expense:

1

In your financial forecasting tool, Navigate to Operating expense tab and click on Add Expense Group button:

2

In the overlay that appears, Enter Expense Group title and click on Save & Next button:

3

After creating expense group, Lets start adding expense items into the group. Click on Add Expense button to open wizard overlay:

4

In the overlay that appears, Enter a name for the expense::

5

Indicate how you want to enter the expense, Select Expense type from the list given below:

  • If you choose Constant amount, enter the amount you'll spend on this expense per day or per month or per quarter or per year, Also indicate the percentage variation in expense amount, For example if you wants to increase rent 5% every year:
  • If you chose Percent of Overall Revenue or specific revenue stream, Select Total revenue or any specific revenue stream that the expense is related to. Indicate the percentage of overall revenue or this revenue stream that should be allocated for this expense:
  • If you chose Percent of Other expenseSelect Other expense from the list that the expense is related to. Indicate the percentage of other expense that should be allocated for this expense, For example if you wants to add percentage brokerage on each yearly warehouse rent amount:
  • If you choose Varying amounts over time or One-time amount, enter how much you will spend in the excel sheet, in the months in which you'll spend it:

6

Time Duration: Then indicate when the expense should begin and end, Select date range.

7

Click Next, follow wizard, Save and Close.

Editing or deleting expense

1

To delete a expense, click on Delete Expense button on expense item:

2

To edit a expense, click on table icon button on expense item.

Where does this entry appear in the financial statements?

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

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

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

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