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Entering Financial Data

Income Statement Data

The PIMS Income Statement uses the “Cost of Sales” method to show the Sales value for the year and allocate the associated costs to functional areas (see definitions below). All values should be taken from management accounts to ensure consistency. If you use “total cost” accounting you can use the sales value of production: the differences in ratios to sales (e.g. EBIT / sales) are small.

Take costs from the management accounting system, which normally has “cost buckets” that can be mapped into the PIMS headings, rather than statutory accounts. If personnel costs are not split out, use organizational charts, etc. to allocate people to the five functions (direct operations, sales & marketing, research & development, general & admin: the last includes everyone not in the first four) and split personnel costs by headcount.

The PIMS definitions are as follows:

Sales revenue	Total revenue from sales of products/services net of bad debts, normal discounts and rebates (also referred to as turnover or sales proceeds). If you use “total cost” accounting you can use the sales value of production.
Purchases	The cost of purchases of raw materials, energy and inbound freight. Purchases of ancillary products and services (waste disposal, maintenance, travel, legal, rent, office supplies, etc.) are not a direct input to what the customer buys - exclude these here.
Total direct costs	The cost of manufacturing, distribution and depreciation. This includes (i) wages, salaries, social costs and fringe benefits of direct labour, (ii) manufacturing supplies, (iii) direct overheads and purchased ancillary services such as maintenance, catering and security for manufacturing facilities and warehouses, (iv) transport, logistics and warehousing and (v) annual depreciation on plant and equipment.
of which Depreciation	The annual depreciation or amortisation charge on your business’s plant and equipment. Also include that portion of lease payments for plant and equipment on long-term leases that corresponds to depreciation.
Total Sales & Marketing	The total cost of the sales organization, media advertising, sales promotion, customer service, market research and other marketing costs.
Total Research & Development	The total costs incurred by this business related to future products and processes, plus R&D services purchased from outside.
General & Admin.	All costs related to general management, planning, accounting, controlling, HR, IT, procurement, legal, HSE, etc. Include people costs, offices, supplies, utilities, outsourced services and relevant charges from corporate HQ.