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People and outsourcing

Business process outsourcing financial model, built free.

A three-statement Excel model for a business process outsourcing, built from your own figures and checked to balance.

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  • Usually ready within the hour

We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Runs clients' back- and middle-office processes (finance and accounting, HR, procurement, claims, collections) under multi-year contracts priced per FTE, per transaction or fixed fee.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued two ways

    Discounted cash flow and trading multiples, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours: its structure and its inputs, ready for your own figures.

Annual · 10 years · Low detail
Business process outsourcing sample model.xlsx
The How It Works sheet of the sample business process outsourcing model

The sample describes no real business. Yours is calibrated to your own figures, so its results are your business’s.

How it works

How the model works for a business process outsourcing.

  1. How it earns revenue1 parts
    Contract revenue
  2. What drives its costs3 formulas
    Service delivery cost · All service contracts
    Service delivery costDelivery labourSupervisionConsumables and equipment
    Mobilisation, transition and contract costs · All service contracts
    Mobilisation and transition costMobilisation cost as % of first-year revenueContract revenue (annual run-rate while active)Years of active service in the mobilisation window this periodMobilisation window
    Operating expenses · Across the business
    Total FTEsOperations and deliverySales and marketingTechnologyFinance, HR and administration
  3. What it invests in3 formulas
    Corporate fixed assets
    Capital expenditureRevenuefrom statementsCapex as % of revenueAdditional planned capex
    Corporate fixed assets
    DepreciationDepreciation of the opening asset baseDepreciation of new capex
    Corporate fixed assets
    Closing net book valueOpening net book valueCapital expenditureDepreciation
  4. How it is funded3 formulas
    Debt
    RepaymentsScheduled repaymentsPrepayments from an equity raise and the cash sweep
    Debt
    Closing balanceOpening balanceDrawdownsRepayments
    Debt
    Interest expenseOpening balanceAll-in interest rateshare of the year
  5. How profit becomes cash3 formulas
    Working capital
    Trade receivablesRevenuefrom statementsDebtor daysDays in period
    Working capital
    InventoryDirect costs (positive)from statementsInventory daysDays in period
    Working capital
    Trade payablesCash operating costs (positive)from statementsCreditor daysDays in period
What it covers

20 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastConsensus curve with long-run anchor
  • Exchange rate (US dollar)Exchange rate by financial year
  • Operating expensesHeadcount build by function
  • Corporate costsFixed cost base indexed to CPI
  • Working capitalFull working capital
  • Income taxCorporate rate with tax losses
  • Corporate fixed assetsStraight-line over remaining life
  • DebtAmortising term loan
  • Dividends and distributionsPayout of net profit
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Multiples valuationEV / EBITDA multiple
  • LeasesLease register
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Discount rate (WACC)CAPM at target gearing
  • Terminal valuePerpetuity growth on normalised cash flow
  • Intangible assets and softwareCapitalised software and platform spend
  • Contract life cycleProbability-weighted renewalWhether and how much of a contract is active in each period — term, renewal, option years, rebid or award probability.
  • Contract revenuePer-transaction pricingRevenue from an outsourced service contract under its pricing mechanism, scaled by how much of the contract is active.
  • Service delivery costLabour build (FTE × wage × on-costs)Direct cost of delivering a contract — labour, subcontractors, materials and consumables.
  • Mobilisation, transition and contract costsExpensed as incurredOne-off costs to win and start a contract — transition, mobilisation equipment — and provisions for loss-making contracts.
Key numbers

The numbers it tracks.

  1. 01contracted revenue
  2. 02renewal rate
  3. 03delivery FTEs
  4. 04offshore share
  5. 05contract margin
  6. 06EBITDA margin
Used for

What it is used for.

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Looking for a business process outsourcing financial model template? Ours arrives built for your business, with your figures in it.

Running a small business? Read what goes into a small business financial model.

See a finished model, sheet by sheet

The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.