How to Set Up a Table of the Monthly Expenses of your Company?
There are 3 great advantages when designing an expense table suitable for your company. This table allows you to:
– control the flow of your investments:
– set priorities in the company’s spending.
– make the necessary adjustments to control expenses over time.
The expense table is an essential tool for each business, regardless of its typology, stage, or size. This table must exist even before the launch of a company and must be updated and analyzed constantly during the normal operation of any company.
Below, we highlight the following key points when setting up an expense table.
Divide the table by 12 and into 4 large groups of expenses
When you draw an expense table, the first step is to divide it by the 12 months of the year because it is extremely important to be aware of the monthly expenses to optimize them. Understand when to spend more and why is essential to the financial health and profitability of a company.
When assembling your expense table, we suggest outlining 4 groups: overheads, personnel expenses, capital expenditures, and taxes.
Of course, these groups may vary depending on the business typology. For example, overheads can be divided into a series of subcategories that often arise in a company’s monthly expenses.
Below, we give you an example of an expense table and then explain the 4 large groups in this table.
1# Overheads
Overheads involve all kinds of expenses that a company needs to operate in its day-to-day life. Electricity, property income, the cost of materials, transportation, insurance, cleaning and hygiene of facilities, computers, software, and computer services, etc.
This part of the expense table is the most customizable to the business typology. The manager must be aware of all the expenses necessary for the company to operate by listing them in this part of the table.
This will help you understand the impact of these routine expenses on the financial health of the company. In doing so you will be able to make the necessary adjustments to make the company more profitable. When analysing these overheads, the manager should always ask the following questions:
– what is necessary and indispensable?
– do I have room to cut or increase overheads?
– what kind of expense should I increase to produce more or better?
2# Personnel expenses
Personnel expenses are among the monthly expenses that any company can count on.
It is in this part of the table that the amounts of each employee’s salaries, the amounts of the food allowance, bonuses, and other expenses, such as training, enter.
In this part of the expense table, it is important that you divide the expenses by company department. For example, management, marketing, logistics. In this way, you can see if staff spending is in line with what would be expected and what margin you have to increase the team in each department according to your objectives.
3# Capital Expenditures
According to the glossary of the Public Finance Council, “capital expenditure comprises capital transfers in the form of investment subsidies and other capital transfers, as well as investment expenditure […] In public accounting the concept of capital expenditure also includes acquisitions of financial assets and liabilities.”
Thus, and in general, a company’s capital expenditures can be divided between “interest” and “debt service”.
4# Taxes
Finally, in a company’s expense table we frame taxes. In general, all companies are subject to the following taxes:
– Single Social Contribution.
– VAT.
Depending on the activity of the company, the place where this activity takes place, among other variants, there will always be other taxes, which should also be considered here.
Looking for an expense table that’s right for your business?
Economic and financial feasibility studies are among the main services provided by Lisboa Investments. If you need help designing an expense table for your business and analyzing it in detail, please contact us.
