Working with annual budgets and rolling forecasts
Using embedded versioning to manage annual budgets and rolling forecasts
1. Annual budgets
Objective: Develop a financial plan that aligns with annual targets and provides a foundation for comparing future actuals and forecasts."
Key activities
Set strategic and financial goals for the year
Review past data to inform budget decisions
Work with different teams to refine budget values
Finalize and set the budget once approved
Share the budget with all relevant parties
Francis includes a feature for locking forecast versions, such as annual budgets. To lock an annual budget, set the Forecast Start date to January and save the current version. This will create a locked version of your budget, available for future reference and comparison.
2. Month-end closings
Objective: After each month, analyze the latest actuals against budgets or forecasts, and use these actuals to inform future forecasting.
Key activities
Record all transactions and close the books in your ERP
Import the latest actuals from the ERP into the financial model
Necessary updates to the mapping between your financial model and chart of accounts
Upon closing your books each month, synchronize your data in Francis and update the Last Close date to indicate the latest month-end close. This allows for a comparison of your budget against actuals and facilitates re-forecasting using the most recent data. Perform this comparison using either the Follow-up and Compare views or the comparison report as detailed in section 4.
3. Rolling forecasts
Objective: Revise the model with the latest actuals and new business insights for an updated projection of the year-end outcome.
Key activities
Include your latest actuals in the new forecast
Make other model edits, e.g., revise projections for revenue, expense, or assumptions
Report the new forecast and comparisons to stakeholders
Working with rolling forecasts, akin to locking your annual budget, revolves around the versioning feature in Francis. Start by adjusting the Forecast Start date to align with your current forecast version (e.g., setting it to April for a Q2 re-forecast). Once you've completed the re-forecast, save and lock the version through the Versions menu.
4. Comparison
Objective: Compare actuals with budgets or forecasts to assess performance and project implications for year-end results.
Key activities
Compare the annual budget to actuals and a re-forecast
Highlight significant changes and trends
Document changes and their causes to improve future budgeting processes
After setting your annual budget and adding rolling forecasts, you can compare them easily. Just pick the budget and forecast you want to look at from the drop-down menus. This lets you check how your actuals compare to your budget and forecast. You can do this for the past month, year-to-date, and for the whole financial year.
5. Reporting
Objective: Report how you're performing compared to your annual budget and any updated forecasts.
Key activities
Report annual budget vs. actuals and/or annual budget vs. rolling forecast
Explain variances between your annual budget, rolling forecast, and actuals
Provide stakeholders with insights into financial performance and decision-making
The embedded versioning feature simplifies reporting on the annual budget, rolling forecasts, and actuals. Navigate to the Charts menu to select and visualize the financial metric you're interested in.
You can then switch between forecast versions using the Sources menu on the chart. This functionality enables comparisons such as actuals versus annual budgets and rolling forecasts. For reporting purposes, you can export all budgets and charts directly as PDFs.
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