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People and outsourcing

Payroll and HR services financial model, built free.

A three-statement Excel model for a payroll, PEO and HR services provider, built from your own figures and checked to balance.

  • Free account
  • No card
  • 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 payroll and HR administration for employers on per-employee-per-month fees, sells HR and payroll software subscriptions, co-employs staff as a professional employer organisation or employer of record, and earns interest on client payroll funds.

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, on illustrative figures: every sheet as Excel draws it, or live.

Annual · 10 years · Low detail
Payroll and HR services sample model.xlsx
The Summary sheet of the sample payroll and HR services model

Illustrative figures: the sample describes no real business. The live preview shows values; your model’s Excel file has every formula.

How it works

How the model works for a payroll and HR services.

  1. How it earns revenue3 formulas
    Recurring revenue and ARR · All product plans
    Subscription revenueOpening ARRClosing ARRshare of the year
    Recurring revenue and ARR · All product plans
    New customer ARRNew customersfrom new customers and sales and marketingARR per new customer
    Recurring revenue and ARR · All product plans
    Net expansion ARRPrice increase on the installed baseUpsell and cross-sell (net of contraction)
  2. What drives its costs3 formulas
    Cost of revenue · All product plans
    Cost of revenueHosting and infrastructureCustomer support and successFixed platform and support overhead
    New customers and sales and marketing · All product plans
    Sales and marketingCustomer acquisition spend (new logos)Account management and renewals
    New customers and sales and marketing · All product plans
    Customer acquisition spend (new logos)New customersCustomer acquisition cost (CAC)
  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

21 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
  • 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
  • R&D and capitalised developmentGross R&D × capitalisation rate
  • Interest-rate forecastMarket forward curve
  • Intangible assets and softwareRegister of acquired intangibles
  • New customers and sales and marketingNew customers per period × CAC
  • Customer base and churnConstant churn rate
  • Recurring revenue and ARRARR bridge on ARPA with price increases and net expansion
  • Cost of revenueCost per customer plus fixed platform cost
Key numbers

The numbers it tracks.

  1. 01clients
  2. 02employees paid
  3. 03revenue per employee per month
  4. 04client retention
  5. 05float income
  6. 06EBITDA margin
Used for

What it is used for.

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Every business and professional services model

Looking for a payroll and HR services 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.