The new feature of hotlink to another forecast allows some great capabilities and outcomes.
Pre-Requisites
To use hotlinks from one forecast to another, they must have the same start date, so the data is matched.
And the record in the source forecast you wish to pull in must be a memo record.
Scenario 1 – Product sales updating financial budget
The usual process of budgeting could start with previous sales history such as customer by product or a variation on that. We will call that the sales budget.
These figures would then form the revenue and maybe Costs of Goods Sold values in the financial budget which is usually based on the general ledger codes structure of the P&L and balance sheet.
- Create a budget based on our product and customer combinations or any mix you want.
- In this budget, add a memo record called Turnover and select Income invoices from the method drop-down list.
- Select all the revenue records to get a total of the revenue.
Note: If you add new records you will need to add them to the memo total. But if you change the value of an existing records, it will be updated when records are recalculated. - Now create the financial budget.
- From any record, select Hotlink from the method dropdown list, click Add then select hot link type Forecast.
- From the select forecast drop down list, choose your sales budget and select the memo record Turnover created in step 2.
- Now your financial forecast will, when recalculated, will be updated from the sales forecast .
Scenario 2 – Intercompany recovery based on turnover
We want to set the office forecast up to calculate and allocate the overhead recovery from head office based on Turnover.
- In the Head office Forecast, build all the relevant expense records
- Add a memo record called Total Admin Recoveries and total the overhead costs to be allocated using the Purchase Invoices method from the drop down box.
- Add memo records for each of the branches and call this Branch # Turnover . We will set the detail up later.
- Add a total Turnover record, select the formula method and add all Branch # Turnover records together.
- Add a record for each branch called Br # H/O allocation and create a formula like this:
(branch # Turnover / Total Turnover)
Note: it will be a fraction, e.g .24 representing 24% of the total turnover - In each branch forecast, add memo record called Turnover and select Income invoices as the method from the dropdown box.
- Select all the revenue records to get the total branch revenue.
- Add memo record called Head office costs. This will be hotlink to the head office record Total Admin Recoveries.
- Add a memo record called % allocation by turnover and hotlink this to the head office record Branch # Turnover
- Add a memo record called HO Allocation. Select formula from the method dropdown and enter this formula:
(% allocation by Turnover * Head office cost) - This will be the branches share of head office cost
- Add a record in overheads (for example) and 100% of memo HO Allocation will bring the cost into overheads etc.
- Back in the Head office forecast, in each of the Branch # Turnover records, Hotlink this record to the relevant branch record Turnover (from Step 6).
- Now that everything has been set up, save the forecast and reopen to initiate the calculations.
The outcome is the expenses in Head office are totalled by the memo, the turnover of each branch is summed and calculates % of costs for each branch. Outcomes will change if the turnover of a branch is updated.
The Head Office costs are calculated and each branch has it share.
Using separately invoice linked records will allow eliminations on consolidations or another memo to sum over head recoveries can complete the process in the head office to report net 0.