Projections

Financial projections use existing or estimated financial data to forecast your business’s future income and expenses.

Projecting Employee Costs

Projecting employee costs is fairly simple – use each person’s cost to the company and take into account any additional employees that may be required based on your forecasts and their costs to the company.

Remember that employee costs include the following:

• Salaries and wage
• Overtime
• Bonuses
• Benefits such as pension and transport allowances
• Other costs such as recruitment costs and training costs.

This information may be readily available from your Human Resources department or you may need to calculate your own breakdowns per staff member.

Projecting Non-Employee Costs

Non-employee costs would include all those costs not associated with employees. Once you have your forecasts, you can estimate these costs.

Examples of operating costs would be:

• Marketing and sales-related costs
• Communications costs such as telephone and internet
• Fees such as legal or accounting fees.
• Occupancy costs such as security, water and electricity.
• Computer costs
• Office costs such as stationery
• Travel costs such as petrol and vehicle rentals.
• Other fees and costs such as insurance and bank charges.

To assist with financial statement projections, you should do separate workings for those employee and non-employee costs that relate to the cost of sales and those workings for employee and non-employee costs that relate to other operating costs.

Projecting other Income and Costs

Other income and costs that can be included in your projections include things like investment income and taxation.