Business Services Support offers training courses in Finance For Non Financial Managers. This course teaches financial planning skills in a fun manner.

1. F INANCIAL P LANNING - H OW
TO
PRODUCE FINANCIAL FORECASTS
PART OF F INANCE FOR NON FINANCIAL
MANAGERS
C OURSE P ROGRAMME
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2. K EY O BJECTIVES

What is financial planning

Benefits of financial planning

How to put together a financial plan

Practice illustration of financial plan
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3. D EFINITION OF FINANCIAL PLANNING

Concern with the determination of
financial resources required to deliver
business goals and objectives
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4. WARNING - FINANCIAL PLANNING T IPS

Financial planning must be preceded by a business plan

Effective financial plans starts from clearly understanding
the vision and mission of a business
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5. O BJECTIVES OF FINANCIAL PLANNING

Help businesses analyse resources

Help businesses determine viability

Action plan for financial weaknesses

Financial resources for meeting goals

How much resources required for investment
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6. F INANCIAL P LANNING V E XTERNAL
E NVIRONMENT
Questions To Be Asked In Regard PEST Analysis:

Political

Economical

Social attitudes
& Changes

Technology
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7. A S IMPLE A PPROACH F OR P REPARING
F INANCIAL P LAN
What resources
are required
The
competition
profile
Key suppliers of
resources
The market
profile
The political
regulations and
economic
conditions
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8. S ETTING R EALISTIC A SSUMPTIONS F OR
F INANCIAL P LANNING
Sales Turnover
Forecast
Expenditure
Forecast
Cash Flow
Forecast
Income and
Expenditure
Accounts (P&L)
Forecasts
Balance Sheet
Forecast
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9. P RACTICAL E XAMPLE FOR PUTTING
TOGETHER S ALES F ORECAST
English Courses:
No of students (demand for English
courses)
500 Students
No of course hours ( i.e. The number 400 hours
of hours students will spend studying
the courses)
Course fee per student
£100
Total sales income forecast
£ 50,000
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10. P RACTICAL E XAMPLE
FOR PUTTING TOGETHER
S ALES F ORECAST
ICT Courses:
No of students (i.e demand for ICT
courses)
200 Students
No of course hours ( i.e. The number 80 hours
of hours students will spend studying
the courses)
Course fee per student
£50
Total sales income forecast
£ 10,000
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11. P ROFILING S ALES I NCOME F ORECAST
Jan
£
Feb
£
Mar
£
Apr
£
May Jun
£
£
Jul
£
Aug Sep
£
£
Oct
£
Nov
£
Dec
£
5000 6000 9000 20000
Sales
Income
January
February
March
April
May
June
July
August
September
October
November
December
Total
Financial
Year
2007/08
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£5000
£60,000
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12. P RODUCING ANNUAL S ALARIES F ORECAST
Staff
Name
Post Title
Gross
Salaries
Employer’s
NIC
Employers
Pensions
Total
Salary
Peter
Jones
Manager
£14,000
£500
£500
£15,000
Denis Bill
Tutor
£9,200
£200
£200
£9,600
£23,200
£700
£700
£24,600
Total
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13. A NNUAL E XPENDITURE F ORECAST
Expenditure
Salaries:
Admin
Tutor
2 (part time)
Marketing & Sales
Rents
Office & Training Equipments
Utilities (telephone etc)
Stationery
Insurance
Professional fees (legal,
accountancy etc)
Other expenses
Total
Assumptions
£
1 (part time)
Manager
£10 per hour x 480
hours
15,000
£300 per month
£60 per month
9,600
10,000
3,600
10,000
1,200
720
400
10,000
10,000
70,520
Summarise your assumptions here:
1. Staffing : 1 Office Manager & 2 tutors (all part-time)
2. Prices of goods and services are based on current market conditions.
3. All cost types have been carefully researched.
4. Professional fees include all types of professional advice required from
the stage of setting up the business etc.
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14. P ROFILING E XPENDITURE F ORECAST
Expenditure
January
February
March
June
July
August
September
October
November
December
Financial
Year
2007/08
£15043.33
£5043.33
£5043.33
£5043.33
£5043.33
£5043.33
£5043.33
£5043.33
£5043.33
£5043.33
£70,520
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15. P UTTING TOGETHER P ROFIT & L OSS
A CCOUNT F ORECAST
£
Sales
Cost of Sales (tutors salaries)
£60,000
9,600
Stationery
Professional fees (legal, accountancy etc)
Other expenses
Net Profit
Commentary
For Users
See total
income forecast
This is a direct
cost of training
services
50,400
Gross Profit
Administration & Overheads
Admin Manager
Marketing & Sales
Rents
Office & Training Equipments (depreciation)
Utilities (telephone etc)
Insurance
£
15,000
10,000
3600
2500
See note below
1200
400
720
10,000
10,000
53,420
3,020
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16. P UTTING T OGETHER OF C ASHFLOW
F ORECAST
WHAT IS CASH-FLOW FORECASTING
A projection of actual cash receipts against
cash payments
A measurement of liquidity
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17. P UTTING TOGETHER T HE C ASH F LOW
F ORECAST
Key questions:
•When do you expect to receive the sales income in your
sales forecast?
• When do you expect to pay suppliers for goods and
services you will purchase?
•What will be your credit policy? In short, will customers
be given credit and if so how many days?
•Are the credit terms extended to customers too generous
or competitive?
•Is there a plan to raise capital for the business from third
parties?
•Who are the main financiers of the business?
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18. C ASH F LOW F ORECASTS I N P RACTICE
Description
Jan- March 07
April-June 07
£
July-Sept 07
Oct-Dec 07
£
£
-12630
Balance brought fwd
£
-10260
Total
-12890
£
Cash Receipts
Sales income- training
10000
15000
15000
15000
55000
Total Receipts
10000
15000
15000
15000
55000
Admin Manager
3750
3750
3750
3750
15000
Tutor
2400
2400
2400
2400
9600
Marketing
2500
2500
2500
2500
10000
900
900
900
900
Cash Payments
Salaries
Rents
Equipment
10000
3600
10000
Utilities
300
300
300
300
1200
Stationery
180
180
180
180
720
Insurance
100
100
100
100
400
Professional fees
2500
2500
2500
2500
10000
5000
5000
10000
70520
Other Expenses
Total payments
22,630
12630
17630
17630
Cash Book Balance
-12630
-10260
-12890
-15520
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19. B ALANCE S HEET F ORECASTS 2007/08
Fixed Assets
Office & Training Equipment
Depreciation
Net Book Value
Current Assets
Debtors
Cash (16000-15520)
Current Liabilities
Creditors
£
£
10,000
( 2500)
7500
5000
480
5480
12980
0
Long-Term Liabilities
16000
Loss in the year
(3020)
12980
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20. B ALANCE S HEET F ORECASTS C ONTD
Office Equipment – Is an asset and the full costs should be recorded in the balance sheet. It is a
tangible item used to create income.
Depreciation- this represents the reduction in the value of the equipments to recognise their
contribution toward income generation. Some assets appreciate in value in real life and so there may
be justification not to make any adjustments for depreciation.
Current Assets- This is a mixture of different types of sub-assets. Debtors are monies owed to the
business- refer to the cash flow forecast. Cash balance is the difference between the loan of £16000
and the shortfall shown in the cash flow forecasts before the loan.
Long-term liabilities- represent the amount of loans borrowed from the bank.
Loss in the year- is the difference between the sales forecast and expenditure forecast shown in the
profit and loss forecast statement.
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21. C ONCLUSION – T HE E ND

For more information about our courses visit:
http://www.businessservicessupport.com
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