Create an operating budget: from revenue to expected profit

Distinguish revenue, gross profit and net result

Revenue is the amount earned from sales. Subtract direct purchase costs to obtain gross profit, then deduct the remaining business expenses. State whether the result is before or after interest and tax. In an ordinary budget with recoverable VAT, use amounts excluding that VAT; costs with non-recoverable VAT need appropriate treatment.

Choose cost categories that fit your business. Billable hours can be the constraint in a services firm. Purchases, stock differences and unit sales may matter more in a shop. Do not reuse a cost list without checking what each row represents.

Example for a complete budget year

This fictional example shows profit before tax of €45,000. Purchases are listed separately to make gross profit visible. Depreciation is an expense; buying the asset and repaying a loan also require a separate cash schedule.

Use the budget to challenge assumptions

For revenue growth, identify the required combination of price and volume. Then check whether purchasing and capacity support it. A 20% revenue increase with unchanged staff costs needs an explanation, such as spare capacity or a demonstrated productivity improvement.

A historical XAF export can provide a starting point from your own entries. Check the selected accounts and reference months. The Rekenbox forecast scales total income and costs separately; it does not build an economic model for each cost type. Explain exceptions and new items separately.