The Single Most-Often-Overlooked Key to Successful Business Planning

Sadly, it’s so simple that it should be obvious: Make sure the way you organize the rows of sales, costs, and expenses in your financial projections match the way your accounting tracks them.

So if your accounting divides sales into widgets, gadgets, and dealios, don’t project your sales as direct, channels, and distributors. And if your accounting divides marketing expenses into personnel, advertising, and PR, don’t project marketing expenses in your business plan as print, online, and social media. And in the picture here, a simple plan vs. actual review for a café, if the accounting divides sales into meals, drinks, and other, then the business plan should divide sales into meals, drinks, and other.

Get your last Income Statement (also called Profit & Loss) and keep it in view while you develop your future projections.

  • 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.
  • If your accounting summarizes categories for you – most systems do – consider using the summary categories in your business plan. Accounting needs detail, while planning needs summary.

If your categories in the projections don’t match the accounting output, you’re not going to be able to track plan vs. actual well. It will take retyping and recalculating. And you’ll lose the most valuable business benefit of business planning: management, steering your company.


  • Jay says:

    Definitely an easy one to overlook. Thanks for pointing it out!

    Do you have any recommended templates? I know there are several online, and it’s hard to find the “right one” for a new startup.

    • Tim Berry says:

      @Jay: yes, I do, and thanks for asking. I strongly recommend Business Plan Pro, because I’m conceptual author, it includes a spreadsheet-like interface and a proven and productized financial model, with lots of help, to keep the financial projections both mathematically and financially correct and as correct as your assumptions. It’s also infinitely flexible so you can do exactly what I recommend here, match the rows of sales and costs and expenses to what your accounting reports show. And, for that matter, you can add and delete as many topics as you want, so every plan is unique.

      And more recently there’s another tool I recommend just as strongly: liveplan, a web app, another tool for doing your own unique business plan with help from software that helps you with the mechanics.

      Disclosure: I’m very biased. Business Plan Pro is published by Palo Alto Software, which I founded and still own. It is based on my 30 years of business planning.

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