Components of This Operating Budget Template
- Revenue: It is usually broken down into drivers and components. One can predict revenue in a year by year basis, but generally more detail is needed by breaking revenue down into its underlying components. Revenue usually include volume and price.
- Variable costs: These are typically costs deducted from the revenue. They are 'variable' as they depend on revenue and are often calculated as a percentage of sales. They generally include: cost of goods sold, direct selling costs, sales commissions, payment processing fees, freight, certain aspects of marketing, direct labor.
- Fixed costs: Fixed costs are deducted after variable costs. These costs do not vary as they are mostly constant. Examples include: rent, head office, insurance, telecommunication, utilities etc.
- Non-cash expenses: These include depreciation and amortization (D&A). These expenses do not impact cash flow (apart from taxes), yet they will impact financial reporting performance.
- Non-operating expenses: These include expenses that fall below the Earnings Before Interest and Taxes (EBIT) or operating income on the income statement. Examples of non-operating expenses include interest, taxes, gains or losses.
- Capital costs in an operating budget: They are usually excluded from an operating budget. The term 'operating' refers to a statement of operations which does not include capital expenditures.
Screenshot of the template.
How to Use This Operating Budget TemplateDownload this operating budget Excel template and modify it for your own budgeting process! All hard-coded numbers are in blue, and all formulas are in black. Be sure to edit only the blue cells with your own numbers, unless you want to intentionally change the formulas.