See Spendable Revenue — CFOSg

See Spendable Revenue

Budgeting off Revenue hides materials, subcontractor and direct costs and lets Operating Expenses bloat. Use Spendable Revenue (Revenue − Mat/Subcon/Direct) and cap Operating Expenses as a % of that.

Spendable Revenue & Operating Expenses cap

Revenue for the month ($)

Materials/Subcons/Direct Costs ($)

Operating Expenses cap % of Spendable Revenue (%)

Actual Operating Expenses (optional) ($)

Spendable Revenue = Sales − Materials/Subcon/Direct Costs. Set your Operating Expenses cap as a % of Spendable Revenue, not Revenue.

Optional: 14-Day Payback check for new spend

Proposed new spend ($)

Profit per sale ($)

Expected orders per day

Payback days = spend ÷ (profit/sale × orders/day). Must be ≤ 14 for safe testing.

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