What this book will do for you

Whether you are a manager in the private or public sector, or a businessman running your own enterprise, this book will lead you step by step, using everyday English, through the principles of setting and managing budgets, and creating profit and loss and cash flow forecasts. You will see how to construct them on a spreadsheet, using examples and templates that you can download for free from the publisher’s website.

Most importantly, having established an understanding of the principles of creating and managing forecasts, the book goes on to describe thoroughly practical approaches to business management using spreadsheet models that can be adapted to your requirements for day-to-day use.

Whether or not you have ever before prepared a budget, a P&L forecast or a cash flow forecast, you will soon be able to build and use budgets and forecasts that precisely match your needs.

Now – budgets and forecasts are, by their nature, very dynamic in the literal sense of the word, something never truer than when they are prepared using a spreadsheet. Books on the other hand are not, by their nature, dynamic in this literal sense – and there is a great danger that through them one of the most important and interesting tools available to managers is perceived as a dry and dusty subject.

So, our aim is to give you a grasp of the subject without sending you to sleep – despite your best intentions! And, equally importantly, to do so in a way that clearly shows what practical and dynamic day-to-day management tools budgets and forecasts can be when spreadsheets are applied to the task.

I’ve addressed these needs in three ways:

• Firstly – and most importantly – by making the example spreadsheet models used in the book available as downloads from the publisher’s website. The idea here is partly to provide an opportunity for obtaining hands-on experience using spreadsheets for budgeting, and partly as additional emphasis to aid and accelerate understanding.
• Secondly – by using straightforward and relevant examples and illustrations from settings familiar to any manager or business person.
• Thirdly – by eliminating accountancy and computer jargon wherever possible. Where the use of technical terms is unavoidable they are explained, usually when they first occur.

Budgets and forecasts are viewed by managers and business people in many different ways, for example:

• for allocating and controlling expenditure
• for forecasting and monitoring sales volumes and revenue
• for departmental breakdown of the whole company’s budget
• for supporting information for a business plan
• as the basis of a bid for raising finance or obtaining higher level authority for a revised strategy
• for profit and loss forecasting
• for cash flow forecasting.

There is no ‘right’ or ‘wrong’ use of budgets and forecasts. Although the list probably covers their most common uses, in reality there are as many applications as there are managers.

If you have previously prepared budgets on paper, you will certainly appreciate the enormous advantages of using a spreadsheet, and quickly see how much more you can do with them. And all of those things you had wished were either possible or practicable, you will now find are easy.

Finally, I hope you will find the book interesting, beneficial and most of all – enjoyable.

Malcolm Secrett