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Operating Model: : The Engine of Forecast+
Operating Model: : The Engine of Forecast+
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Written by Baremetrics
Updated over a week ago

At the core of Forecast+ lies the operating model, made up of the three fundamental components of any business: the Income Statement (Profit & Loss), Balance Sheet, and Cash Flow Statement. Each of these components features two distinct sections - the 'actuals' and 'forecasts' (except the Budget scenario, which is fixed for the year and hence does not include actuals).

The operating model provides the option to toggle between three financial statements, choose between scenarios, select the year, and split the data into actual and forecasted values.

Actuals: This section is populated with data pulled from your accounting integration once you confirm that the books are closed for the latest month. Forecast+ currently supports integrations with QuickBooks and Xero. As soon as your books are closed on these platforms and you confirm to sync them into Forecast+, the updated numbers are automatically synced to your Forecast+ operating model. This ensures that you always have the most up-to-date view of your financials.

Forecasts: You can set drivers for various P&L and Balance Sheet accounts to forecast future amounts. These drivers can be simple averages, average growth, a percentage of revenue for non-revenue accounts, or other customizable options. Once you set your drivers on autopilot, the forecasts will automatically update on a rolling basis as new actuals are loaded. This creates a dynamic forecasting model that evolves with your business. Cash flow statements are a function of P&L and Balance Sheet changes and therefore do not require any forecasting efforts.

However, not all scenarios can be predicted using autopilots. This is where manual adjustments come in handy. For instance, if you anticipate a new cost, expect new business income, or have an exceptional item due, you can manually input these into the forecast section. This combination of automated and manual forecasting ensures that your operating model is both efficient and flexible, accurately reflecting the realities of your business. (We will study forecasting methodologies in much greater detail in the relevant section.)

Clicking on any account name will open up the editor where you can define the autopilot forecast in the line settings. To manually change any value, simply double-click the cell, input the new value, and press enter

In essence, the operating model functions as the brain of Forecast+, providing the analytical power behind your business planning and strategic decision-making. With this robust system at its core, Forecast+ empowers you to navigate the business landscape effectively, no matter what lies ahead.

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