Annual Budget Template (FP&A Operating Plan)

Annual Budget: [Organisation name] FY[YYYY]

Annual operating plan and budget pack for a group or business unit: targets, planning calendar and approval route, strategic priorities, key assumptions, revenue plan, headcount and people cost, operating expense by cost centre, capital expenditure, budgeted income statement, balance sheet and cash flow, sensitivities, monthly phasing and sign-off. Written as original practice guidance for financial planning and analysis (FP&A); budget preparation is not prescribed by a standard, but approval by the board or its delegate is normally required by the articles, the delegation of authority and lender covenants. Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax, legal or accounting advice.

Document control

Approvals

Revision history

Contents

1. Executive summary and targets
2. Planning calendar, roles and approval route
3. Strategic priorities and KPIs
4. Key assumptions
5. Revenue plan by segment
6. Headcount and people cost
7. Operating expense by cost centre
8. Capital expenditure plan
9. Budgeted income statement, balance sheet and cash flow
10. Sensitivities, risks and opportunities
11. Phasing by month and quarter
12. Budget control and governance after approval
13. Approval and sign-off
14. Glossary and references

1. Executive summary and targets

[Two to four paragraphs: what the budget delivers, the growth and margin story, the investment choices, the funding position and the main risk.]

Example: The FY2027 budget for Corvid Commerce Group targets revenue of EUR 160,000k, up 14.3% on the FY2026 latest estimate of EUR 140,000k, and EBITDA of EUR 21,600k (13.5% margin, up from 12.0%). Growth is led by the subscription platform (annual recurring revenue from EUR 86,000k to EUR 106,000k). Commerce grows at a slower 8.0% as the group shifts mix towards higher-margin consumables. The budget funds 75 net new roles, the largest share (30) in research and development, mostly in Vietnam, and EUR 12,000k of capital expenditure, of which half is capitalised platform development. Closing cash is EUR 26,400k with an undrawn revolving facility of EUR 20,000k; both group facilities mature on 2028-06-30, so the budget assumes they are refinanced by 2027-06-30 (ASM-013). The two largest exposures are commerce volume (a 10% shortfall costs about EUR 1,620k of EBITDA) and the US dollar (a 10% weaker dollar costs about EUR 1,700k of EBITDA).

The FY2026 column is the latest estimate available when the board approved the budget in December 2026. Replace it with actuals in the final pack: for the example, FY2026 capital expenditure paid was EUR 8,200k against the EUR 9,500k latest estimate, as reported in Covenant Compliance Certificate (finance/covenant-compliance-certificate).

2. Planning calendar, roles and approval route

The cycle runs top-down then bottom-up: the board sets targets from the strategic plan, budget holders submit costed plans, finance consolidates and challenges, and the executive closes the gap before the board approves.

2.1 Roles

3. Strategic priorities and KPIs

Set targets for growth and margin through OKRs where the organisation uses them; see OKR (business/okr). The budget states the financial consequence of those objectives, not the objectives themselves.

4. Key assumptions

4.1 Rules for budget rates and conventions

• Budget FX rates are used for the whole year in the budget, the rolling forecast at constant currency and the variance analysis. The translation effect of actual rates is reported as a separate FX variance.
• Amounts are EUR thousand, positive for income and cost, and rounded in each table; small differences in totals come from rounding and are not adjusted.
• The budget uses the same accounting policies as the statutory accounts. From FY2027 the group reports under IFRS 18 (effective for annual periods beginning on or after 2027-01-01); budget subtotals follow the subtotals the group will report so that actuals compare like for like. See IFRS 18 Transition Plan (finance/ifrs-18-transition-plan).
• Management performance measures such as EBITDA are defined once in the glossary and reconciled to the reported subtotal in the monthly management report.

5. Revenue plan by segment

5.1 ARR roll-forward

Check: 86,000 + 14,500 + 10,800 - 1,600 - 3,700 = 106,000. Gross revenue retention is (86,000 - 1,600 - 3,700) / 86,000 = 93.8%; net revenue retention is (86,000 + 10,800 - 1,600 - 3,700) / 86,000 = 106.4%. Unit economics behind these figures sit in Unit Economics Analysis (finance/unit-economics-analysis).

5.2 Revenue by entity and currency

Check: 25,800 / 0.86 = 30,000; 24,640 / 1.10 = 22,400; 107,600 + 30,000 + 22,400 = 160,000. US budget phasing: Q1 USD 6,160k, Q2 to Q4 USD 18,480k. CC-VN earns only an intercompany cost-plus fee, which is eliminated on consolidation, so it has no external revenue; its costs sit in research and development and in delivery. The US entity sells subscriptions only, so US subscription revenue is the group's whole US dollar revenue exposure (ASM-014).

6. Headcount and people cost

Average FTE here is the simple average of opening and closing; replace it with the month-weighted average from the position list. People cost is shown gross: EUR 4,800k of research and development people cost relates to platform development that meets the capitalisation criteria and is credited to capital expenditure (CAP-001) in section 7, so it is not counted twice. Loaded cost includes salary, the 3.5% pay review from 1 April (ASM-005), employer social charges, benefits and bonus at target. The total loaded cost per FTE is 53,125 / 722.5 = 73.5.

6.1 Position list extract

A hire starting in month m costs (13 - m) / 12 of the annual loaded cost in a calendar year: 48 x 9 / 12 = 36; 150 x 11 / 12 = 137.5; 78 x 6 / 12 = 39.

7. Operating expense by cost centre

Checks: 17,850 + 15,000 + 3,150 = 36,000; 17,150 + 11,200 + 1,650 - 6,000 = 24,000; 8,775 + 1,800 + 3,825 = 14,400. Research and development programmes and tools comprise tools, licences and development environments of 5,200 and external development contractors of 6,000. The capitalised amount of 6,000 is internal people cost of 4,800 plus contractor cost of 1,200 on qualifying platform features; gross research and development spend is 30,000, of which 24,000 is expensed and 6,000 capitalised. In G&A, programmes and tools are professional fees; facilities and other comprises facilities of 2,400 and other costs of 1,425. People cost in operating expense (43,775) plus delivery people in cost of sales (9,350) equals the total people cost of 53,125 in section 6.

Cloud hosting sits in cost of sales for the subscription segment. Tie the cloud figure to the FinOps forecast in FinOps Cost Review (ops/finops-cost-review).

8. Capital expenditure plan

Projects above [EUR 1,000k] follow Capex Request (finance/capex-request) with an appraisal from Investment Appraisal (finance/investment-appraisal). Approval limits come from Delegation of Authority Matrix (finance/delegation-of-authority-matrix). Capitalisation of development cost follows the group accounting policy; the budget does not change the policy.

9. Budgeted income statement, balance sheet and cash flow

9.1 Income statement

FY2027 net finance cost: term loan interest 1,200 (4.0% x 30,000) plus lease interest 360 less interest income on cash 360 = 1,200. The FY2026 impairment of EUR 2,600k follows the annual test at 31 October (Impairment Test Memo, finance/impairment-test-memo); it is outside EBITDA under the group definition (glossary) and is treated as not tax-deductible in the example, so FY2026 tax is 25% of 9,900 = 2,475.

Cost of sales by segment for FY2027: subscription 19,200 (gross margin 80%), commerce 37,800 (30%), services 7,000 (30%); total 64,000.

9.2 Cash flow

Classify cash flow lines under the group's cash flow policy; the lines above are a management view.

9.3 Balance sheet and funding summary

Checks: lease liabilities 8,000 - principal repaid 1,600 = 6,400 (no new leases budgeted); covenant net debt 2,000 + 8,000 + 1,000 = 11,000 and 3,600 + 6,400 + 1,000 = 11,000; liquidity 28,000 - 1,000 + 20,000 = 47,000 and 26,400 - 1,000 + 20,000 = 45,400. The 2027-12-31 liquidity counts the revolving facility only because ASM-013 assumes refinancing by 2027-06-30: without it, the facility has six months to run at year end and liquidity would be 25,400, below the EUR 35,000k treasury minimum. FY2026 covenant EBITDA of 17,800 includes the add-backs the facility agreement permits; the FY2027 figure uses budget EBITDA with no add-backs.

The 0.17x management ratio is the headline used in this pack; the covenant ratio on the facility definition (leverage at most 3.00x, interest cover at least 4.00x) is shown in Covenant Compliance Certificate. Test every covenant on the definitions in the facility agreement, not on these management definitions; use Covenant Compliance Certificate (finance/covenant-compliance-certificate) for the formal test and Treasury Policy (finance/treasury-policy) for headroom limits.

10. Sensitivities, risks and opportunities

Check SEN-003: 24,640 / 1.21 = 20,364, so revenue falls by 2,036; 1.10 / 1.21 = 0.909, so the net USD exposure of EUR 18,667k (US revenue less the one sixth of US costs incurred in dollars, ASM-014) falls by 18,667 x (1 - 1.10 / 1.21) = 1,697. The same one-sixth cost offset is used in Rolling Forecast (finance/rolling-forecast) driver DRV-009. Hedging of this exposure is a treasury decision under Treasury Policy (finance/treasury-policy): CC-US remits most of the surplus to CC-DE as a USD platform fee (forecast USD 16,000k), which treasury hedges in bands, so the budget is shown before hedging.

Record material risks in the enterprise register, see Risk Register (compliance/risk-register). Downside scenarios for funding are tested in Liquidity and Funding Plan (finance/liquidity-funding-plan).

11. Phasing by month and quarter

Q1 revenue by segment: subscription 22,600, commerce 12,400, services 2,000 (total 37,000). Q4 carries the seasonal commerce peak.

12. Budget control and governance after approval

• Freeze. The approved budget (version 1.0) is loaded into the ERP and reporting tool and not changed. Outlook changes go into Rolling Forecast (finance/rolling-forecast).
• Spending control. Commitments are checked against available budget at purchase-order approval. Over-budget commitments follow the delegation of authority.
• Transfers. Budget holders may move up to [EUR 100k] between their own cost lines with FP&A approval; transfers between functions need CFO approval and are logged as BTR-NNN.
• Variance reporting. Monthly actual versus budget with commentary above thresholds, see Variance Analysis (finance/variance-analysis) and Monthly Management Report (finance/monthly-management-report).
• Re-budget. Only on a board decision after a structural change (acquisition, disposal, change of strategy). The old budget is kept for reference.
• Incentives. If bonus targets use budget figures, state which version and how FX and acquisitions are adjusted.

13. Approval and sign-off

14. Glossary and references

14.1 Glossary

14.2 References

Standard and licence note

Structure aligned with common financial planning and analysis practice for annual operating budgets; no standard prescribes the content of a corporate budget. The FAST Standard (version 02c, FAST Standard Organisation, CC BY 4.0) and IFRS 18 are cited by name and, for IFRS 18, by effective date only; no text from either is reproduced. IFRS is a trade mark of the IFRS Foundation; this template is not affiliated with or endorsed by it. Corvid Commerce Group and every figure are fictional. This template is original text written for this collection. Check the current official versions of cited standards before use. Template licence: MIT.