22. First Year Financials by MonthBy Roger Bryan
The financial details of your business plan should be prepared monthly for the first year and should be updated regularly. By drawing up your cash flow mechanism and revenue stream plans on monthly basis, you can get a clearer picture of the financial section of your business plan. There are various other reasons for detailing the financial plan on monthly basis.
First, it helps keep a check on the expenditure. A sudden rise in expenditure can be carefully scrutinized and reason for the same can be inculcated in the future business plan model. Also, the monthly detail of the business financial statements helps in allocating the savings, if any in a better manner. For e.g. in case there is less expenditure than expected, then you may make a provision in your business plan (after tallying the results) for diverting that money to other section such as marketing or a bonus depending on the situation at hand.
On the excel sheet on which you are drafting the monthly financial details, you may include as many lines as possible for better understanding of the monthly statements. If you business is huge, the excel sheet may run into many pages but the core principle of the monthly plan remains the same i.e. detailed listing of what the financial influx for the future will be backed by the inputs that are required to achieve that goal.