How can I enter provisions?

This article explains how to enter provisions in The Business Plan Shop's financial forecasting software. 

This data enables our software to build your financial statements (balance sheet, P&L, cash flow statement), which can then be downloaded along with your business plan.

It’s fast and easy to do.

the classification, name and value of the inventory write-off provision

How can I add or edit provisions in The Business Plan Shopour software?

Firstly, follow this link to access the provisions module.

Once you are on the module, you can either click the add button at the top of the list to add a new provision or edit an existing one. 

If you are on desktop, to edit an existing provision:

  • Hover your mouse over the row containing the provision in the list
  • Click the edit button that appears

If you are on mobile, to edit an existing provision:

  • Click on the settings icon at the end of the row containing the cost in the list
  • Click on the edit button that appears

How does the edit provisions module work?

The module contains tabs that enable you to enter the financial data required to model the provison

Settings tab 

The settings tab allows you to enter the name, category and the amount for the provision. 

You can also detail any changes that have occurred to the provision amount during the financial year (accruals and reversals).

Increases (decreases) will show in the expense (income) section corresponding to the P&L classification indicated.

The closing balance of the provision will be applied on the balance sheet according to the classification specified here.

Note that if you use the annual summary section to enter data, the software will automatically allocate the value to the first month.

Comments & notes tab

The comments & notes tab lets you write down your hypothesis, notes or comments. 

Notes are private and only visible to you, whilst comments can be seen by other users you invited to collaborate with you on your plan.

How does the edit provisions module impact my financial forecast?

The Business Plan Shop's Our software will use your provisions data to create your forecasted financial statements (P&L, balance sheet and cash flow statement). 

These statements also form part of the financial plan section of your business plan. 

As soon as you save a new provision amount, the software will automatically recalculate everything to ensure that your financial forecast is up to date. It’s fast and simple, meaning that your plan will always be ready to export.

When building your forecasted financial statements:

  • We’ll use the amount entered to build the relevant expense section in your P&L (D&A, financial or exceptional expenses) and adjust the balance sheet. 
  • Provisions don’t impact your cash flow forecast directly, but they reduce your corporation tax liability which can impact your cash flow.

What advice can you give me before I begin editing my provisions?

Provisions are accounting adjustments that allow you to set aside part of your profits to cover an expected liability, even though the exact probability of the liability materializing or the specific cost to the business might be unknown.

They have no direct impact on your cash position, they simply allow you to record the existence of this potential liability on your balance sheet.

The best practice when doing business plans is to avoid using provisions, and instead to create two scenarios: one where the risk materializes (worst case), and one where it doesn't (best case). This enables you to get a better picture of your cash flows.

Our recommendation is therefore to only use this module if you have an existing business which had provisions created by an accountant.

Frequently Asked Questions

How do I change the name of a provision?
  • Firstly, click on the settings tab at the top of this page
  • Next, you’ll see a text box with the heading “What's the name of this provision?" entering investment grant 1A as the grant name into the business plan software
  • Enter your chosen name into the text box given (In this example, we’ve chosen Inventory write-off as the name of the provision).
  • Finally, press the “save and close” button. 
How can I enter the provision amount?
  • Firstly, click on the "settings tab" at the top of the page:
  • Next, you’ll see a table with the heading "What's the amount for this provision?" entering annual data for the investment grant amount
  • Enter the provision amount into the software
  • Press save & close
How can I group provisions in the P&L using segments?

Classifying your provision by segment allows you to group provisions in your forecasted financial statements.

This means that you can breakdown and adjust the level of details when you export your business plan.

grouping provisions by segments

To classify your provision by segment:

  • Firstly, click on the settings tab at the top of this page
  • Next, scroll down to the bottom of the page and click on “show advanced parameters”
  • You’ll see a text box with the heading “does this element belong to a segment?
how to enter a segment in the business plan shop's financial forecasting software

Enter your chosen segment name into the text box given

  • If you don't want to use a segment leave the field empty or on “Global”

Finally, press the “save and close” button 

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