Tracking the costs that your business saves and avoids can help you make future projections for your company's cash flow and needed cash on hand. One of the best ways to do this is with a spreadsheet program that can point out both hard and soft savings. Hard savings (reduction) are tangible costs decreases from one year to the next. Soft savings (avoidance) are when processes improve while costs stay the same, such as when your employees become more efficient, a supplier offers free training or a free software upgrade improves operations.
Open your word processor.
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Write out your expenses and group them into categories.
Open up an Excel spreadsheet.
Type "Expenses" in the top left cell on your spreadsheet.
Move your cursor down one cell.
Press the B-shaped bold button in the "Font" section of your toolbar.
Type out the name of your first category.
Type out the names of each expense in the cells below with one expense per cell. Be sure to stay within the same column.
Move your cursor down one cell and type "Subtotal."
Repeat steps 5 through 9 for each expense category you have.
Move your cursor to the top cell in the next column.
Type "Actuals" and last year's date to label this column. For example, if creating this in August 2013, you would type "Actuals 2012."
Move your cursor down and enter the dollar amount for each expense from the prior year. Do this for all expenses in each category.
Label the next column "Current Adjustments."
Move your cursor down and enter the numerical value for percentage increases or decreases expected for each expense as per your contracts. For example, enter "0.2" for a 20 percent increase or "-0.2" for a 20 percent decrease.
Label the next column "Baseline."
In each row, enter the formula to multiply the amount in each its "Actuals" amount by one plus its "Current Adjustments" value. The formula will look like "=([Actuals cell number][1+(Current Adjustments cell number)" -- for example, your first expense's formula will be "=B3(1+C3)."
Label the next column "Current Year Actuals." This column will remain blank until your year-end amounts are determined for each expense.
Label the next column "Difference."
In each row, enter the formula to subtract its "Current Year Actuals" number from the number in that row's "Baseline" column. Positive numbers are the amount you have saved compared to the year before.
Navigate to your first category's "Subtotal" row.
Enter a formula to add all of your category expenses together. For example, if a category's expenses are located in cells A12 through A16, the subtotal formula for the previous year actuals in that category will be "=SUM(B12:16)."
Repeat the addition formula for each column.
Use the summation formulas for the "Subtotal" rows as in steps 21, 22 and 23 for each category.
Navigate to the first cell in the bottom row that has content in it.
Move your cursor down two spaces and type "Totals."
Enter a summation formula to add all of your Category expense subtotals together. For example the formula for the "Actuals 2012" total will look something like "=SUM(B17+B30+B35)" if your subtotals are in rows 17, 30 and 35.
Repeat the formula for each column in your spreadsheet.