A fully integrated business planning and financial forecasting software gives you the freedom to plan accurately and effectively in all aspects of your business. By integrating performance management and cash flow recasting our unique business planning system can greatly benefit your organisation. So, to make business planning even easier for our clients, the following is a guide to creating a forecast with ProForecast.
PROFORECAST is template driven so that a complex forecast can be built rapidly and accurately without the necessity to build formulae. There are templates covering cost centers, loans, capital structures, and revenue models. All templates can be used in combination with each other, so that for instance if the range of inbuilt templates does not exactly mirror the requirements of the user, by using multiple templates in combination the user can create the scenario required.
The plan sequence is as follows: –
- Add Plan and enter basic company information and create structure.
- For an existing business build the opening Balance Sheet and use sub tables to break out balances.
- Create loan structures
- Add commercial data, departmental costs, salaries, fixed asset purchases, capital structures etc
- Create revenue models
- Run “What If” scenarios
- Output the reports
Following the creation of the revenue models the plan is finished, the output reports can be viewed and the global “What If Analysis” tool can be run, which includes Price Elasticity of Demand, and Monte Carlos analysis of sales and gross margins.
ProForecast is designed for top-level strategic forecasts to be done in a detailed and accurate way. The Step Change® function is of major value here: e.g. factor in sudden interest rate or component cost changes, currency rates or any other change. It can help you and your clients make decisions on new products and their timing, perform stress testing to justify investments and persuade stakeholders, evaluate investment opportunities and a range of other strategic decisions.
How to create a forecast
- Having created a plan, set this plan as the current plan by double-clicking on the plan’s name.
- Then select the forecast option in the menu and begin to enter data that is relevant to your forecast.
A thing you should know before adding your numbers to the programme:
- Every line of date has a primary entry, the base cost which can then be varied multiple times throughout the plan by using the step change. This function enables costs and revenues to be stepped up or down at any point within the plan. This is a micro “what-if analysis” tool and can be used to see the effect of very precise changes in the business operation. However, there can only be one step change per month per account heading.
- Forms are used to enter data and tables display those entries. Month numbers are crucial for any plan and are independent of the actual year or month. In essence month 1 is the first month of the plan and month 72 would be the last month of a 6-year plan, etc. Any changes or additions are made by entering the appropriate month number, not by using a date. All the output reports will show the month number and date for easy reference.
- The usual data entry sequence would be as follows: –
- If the forecast is for an existing business enter the Opening Balance Sheet Data.
- Use the Commercial Setup Menu to set up any loans, capital structures, and general commercial terms.
- Go through the various departments and set up the departmental expenses and payroll.
- Go through the various divisions and set up the divisional departmental expenses and payroll.
- Go through the various revenue and cost of sales models. Multiple revenue and cost of sales models can be used within the same forecast and experience will tell which modules can be used to closely model a particular business so it is important at this point to understand the key revenue drivers so that the appropriate combination of revenue models can be used.
- Once the plan is finished, select calculate and then the dashboards and output reports can be viewed.
We hope this helps! And if you have signed up for ProForecast already, you can find more help on our support site.