How to prepare a budget forecast?
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Jul 8, 2024
The forecast budget is an essential management tool for any company. However, creating a forecast budget is not always an easy task. Where to start ? What expenses should be considered ? How to anticipate expenses without forgetting anything ? Discover in this article all our tips for creating a forecast budget.
Step 1: Choosing the Tool

Which tool to choose to create a forecast budget? There are three ways to build a forecast budget :
By using Excel or other spreadsheets. While this type of tool offers notable flexibility, the task is nevertheless extremely time-consuming. Furthermore, it requires having both good knowledge of accounting and expertise in financial modeling, at the risk of ending up with incorrectly linked cells and errors in the figures.
Hiring the services of an accountant. This option allows you to relieve a significant workload, but it is particularly expensive.
The best solution remains that of a forecast budget tool, and more broadly, online management reporting what is reporting?. Indeed, these tools allow for considerable time savings through automation and user-friendly design to facilitate your experience. Moreover, if you encounter issues or cannot implement everything, a support team is at your disposal. Unlike Excel, where if a mistake is made, no one can help you correct it.
Step 2: Refer to Historical Data of the Company
Before even creating your forecast budget, you will need to gather certain information:
The historical data of your company (financial statements from previous years, previous forecast budgets, KPIs…)
Your knowledge of the industry
Your market research
…
All this data is important as it will help you understand how the company has evolved in operational and financial terms (example: revenue growth, changes in cost structure, investment and growth levers implemented.)
Step 3: List Receipts and Payments
The forecast budget is a table with columns representing months and rows representing expense items or income. This table should include:
Receipts (= income)
Payments (= expenses)
Receipts
First, you need to establish a list of expected income for the coming months. To simplify the task, you can categorize them.
Subsidies or auxiliary financial aids (URSAFF reimbursements, employment bonuses, research tax credits…)
Sales & customer invoicing
Diverse bank loans, factoring, crowdfunding…
Capital contributions
VAT credit (if you deduct more VAT than you collect)
Partner current account contributions
You can go even further into detail depending on your needs. For example, you can specify whether the receipt was made in cash, by check, by bank transfer, etc...
Payments
Now it's time for the payments to undergo the same scrutiny. List all your payments (expenses).
Fixed Costs: Fixed costs correspond to expenses and fees that are recurring.
Facility costs : Rent, cleaning and general maintenance, subscriptions (internet, phone, software…), water and electricity;
Personnel costs: salary, employer contributions, social charges, meal vouchers;
Insurance (property, liability…);
Purchase of supplies;
Marketing (advertising, SEA, social media, flyers, trade shows…);
Loan repayments;
Bank fees (account maintenance, transaction charges);
Taxes;
VAT.
Variable Costs: Variable costs, also known as "operational costs," vary depending on a company’s activity and revenue growth.
Purchase of raw materials and other supplier charges;
Shipping costs;
Transportation costs;
Commercial gestures and customer refunds;
Service providers (accountants, lawyers, subcontracting, auditors, management consultants);
Packaging costs;
Subcontracting contracts;
Commissions;
Distribution costs.
Step 4: Ask the Right Questions

To protect your cash flow, it would be wise to ask yourself some questions. They will help you identify expenses that harm the financial health of your company:
- What are the essential expenses for your company ?
- What are the unnecessary expenses for your company ?
Some best practices according to Qotid :
Be particularly cautious with your variable costs; it is quite easy to underestimate upcoming expenses.
Pay attention to the payment deadlines of your clients and/or suppliers. The dates of receipts or payments should be recorded as precisely as possible.
Do not neglect small amounts : you may think that on their own they don't represent much... But if you add them up, they can quickly put you in the red.
Consider the risk of experiencing payment delays. Ignoring them can put you in difficulty as it is a central element of your cash flow plan.
To summarize:
The forecast budget is an essential management tool for any company. To create an effective forecast budget, it is important to choose the right tool, refer to the historical data of the company, list the receipts and payments, and ask the right questions to protect cash flow. Online forecast budget tools like Qotid are a recommended solution for their time-saving and user-friendliness. It is important to consider fixed and variable costs, be mindful of payment deadlines and small amounts, and anticipate potential payment delays.
F.A.Q :
What is a forecast budget?
A forecast budget is a management tool that allows you to anticipate a company's receipts and payments for a given period.
Why is it important to create a forecast budget?
A forecast budget allows planning the company’s expenses and revenue, anticipating cash flow needs, and making informed decisions regarding financial management.
How to determine if an expense is essential or unnecessary for the company?
To determine if an expense is essential or unnecessary for the company, it is advisable to ask the right questions, such as: "Is this expense necessary for the functioning of the company?", "Will this expense generate additional revenue for the company?" or "Can this expense be reduced or eliminated without affecting the quality of the company’s products or services?".