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If your categories in the projections don't match the accounting output, you're not going to be able to track plan vs. Accounting needs detail, while planning needs a summary.

If your accounting summarizes categories for you – most systems do – consider using the summary categories in your business plan.

If you don't have more than 20 or so each rows of sales, costs, and expenses, then make the rows in the projected statement match the rows in the accounting.

Get your last Income Statement (also called Profit & Loss) and keep it in view while you develop your future projections. If you're planning for a startup business, coordinate the bookkeeping categories with the forecasting categories. If bookkeeping tracks sales by product, don't forecast your sales by channel instead. So if your chart of accounts divides sales by product or service groups, keep those groups intact in your sales forecast. If the accounting divides sales into meals, drinks, and other, then the business plan should divide sales into meals, drinks, and other. Match your chart of accounts, which is what accountants call your list of items that show up in your financial statements. It should be obvious: Make sure the way you organize the sales forecast in rows or items or groups matches the way your accounting (or bookkeeping) tracks them. actual results, and make corrections that's already business planning. If nothing else, just forecast your sales, track plan vs. actual use, even if you do no other numbers. The sales forecast is almost always going to be the first set of numbers you'll track for plan vs. People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth. Your sales forecast is also the backbone of your business plan. If you think sales forecasting is hard, try running a business without a forecast. actual results every month, you can easily make course corrections.

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What you want is to understand the sales drivers and interdependencies, to connect the dots, so that as you review plan vs. Your sales forecast won't accurately predict the future.

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So let's look at how to forecast sales, step by step. And the past, by itself, isn't the best predictor of the future. All those sophisticated techniques depend on data from the past. I was a vice president of a market research firm for several years, doing expensive forecasts, and I saw many times that there's nothing better than the educated guess of somebody who knows the business well. Don't think it's about sophisticated financial models or spreadsheets. Don't think you need to have an MBA degree or be a CPA.

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