Actuals – The Dull Part of Planning!
One of the first exercises we do when we start building a new corporate planning system is link the planning tools to the ERP so we can load actuals. History, be they general ledger balances, sales by product, stock balances, headcount or labour, we invariably need historic information right up front.
Well, this does a couple of things.
Firstly it allows us to create structure – accounts, cost centres, products, staff, customers etc.
Secondly, with the structure there, we can load history and prove our calculations work.
But they’re not the most important reasons.
The key reason for loading actuals is simple. Once your forecast is live, it gives you an analytic platform for assessing your plans against what has happened in the past. You’d have to question why, for example, you are forecasting sales of $1m per month, when history is $750k. Or if your labour costs are tracking at $6.5m per month and all of a sudden you’re forecasting $5m per month, I reckon you’ll find something out of whack somewhere.
The next most important reason for uploading history is this. If you hate reconciliations as much as I do, then loading and reconciling actuals once into a plan is enough. Loading again and re-reconciling into a BI tool is just dumb. So load it into a tool that can act as source for both reporting and analytics and for your planning. Load once, reconcile once, use as widely as possible.
This then begs the question: How easily can you refresh your actuals into your budget or forecast?
It literally should be the click of a mouse, or even better an automated process that just works every day. If it’s not that easy, your planning will become “to hard” to manage and you’ll lose one of the major benefits of planning – being able to react fast and with confidence to changes in your game.
What are your thoughts on the importance of getting actuals into your forecast model early and re-using reconciled data for multiple purposes?
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