Manage Three-Way Forecasting

Note:

Three-Way Forecasting rules are currently in feature preview. For more information, please contact xpna Support via email at support@xpna.co. > Documentation for this feature is still a work in progress.

As part of xpna's planning and forecasting capabilities, flexible planning rules can be created to model how planning inputs are distributed over time within the model.

The rules in a 3-way forecasting model allow for the distribution of a planned amount across various accounts over time. For example, consider Revenue. When revenue is recognized, it's allocated 100% as a credit to the Revenue account and 100% as a debit to Accounts Receivable.

In the following month (+1), the model might predict that 75% of the revenue will be received from customers. Consequently, 75% is credited to Accounts Receivable to reduce its balance, and 75% is debited to Cash at hand or a bank account.

In the next month (+2), the model assumes that the remaining 25% will be received, except for 1% that is expected to become Bad Debt. Therefore, 25% is credited to Accounts Receivable, while 24% is debited to Cash at hand, and 1% is debited to Bad Debts. This process allows for a detailed and time-phased allocation of amounts across accounts, reflecting expected cash flows and potential losses.

Scenario-Based Forecasting

Three-Way Forecasting is not enabled by default. It can be activated for any non-Actuals scenario in Scenario Management by toggling the Three-Way Forecasting option and assigning a default three-way forecasting account.

Scenario Cloning

When a scenario is cloned, the status of Three-Way Forecasting, along with any rules created for the source scenario, will be copied to the newly cloned scenario.

If these rules are not required, Three-Way Forecasting can be disabled. Disabling this feature will not delete the existing rules, but they will be ignored during planning activities.

Managing Rules

Multiple rules can be created per scenario, with the condition that any given account can only be included in one rule per scenario.

Creating a Rule

To create a new rule, first select the desired scenario, then click the Add first rule or Add rule button located in the rules list on the left-hand side.

This action will open a template for the rule in the main area of the window. By default, the rule template includes a column for the current month, current month +1 and placeholders for the source account(s) and target account.

After selecting a source account, the system will automatically allocate 100% to the appropriate column (debit or credit) based on the account type.

Note:

Flip the sign of the source accounts default percentage allocation using the double arrow swap icon.

Similarly, target accounts can be added or removed using the + button at the bottom of the target accounts section, and the Delete button available on each target account.

Each column must balance the debits and credits for the allocated source and target accounts. Any discrepancies will be highlighted in the column total.

Periods can be added before or after the current period using the + buttons, which appear when hovering over a column heading. Columns can be removed using the Delete button, which is also visible when hovering over the column heading.

Account Selection

To select a source account, click on the row header for the source or target account. This will open the familiar hierarchy management search and tree view.

When selecting source accounts, multiple accounts can be chosen, which will appear on the right side under Selected Members. A specific account can be removed by re-selecting it or by removing it from Selected Members. To clear all selected accounts, use the Remove all button.

For target accounts, a member selector is shown in place to allow for the selection of a single leaf account member

Notes:

When selecting source accounts, if a roll-up/grouping is chosen, all leaf accounts under that grouping will be added to the Selected Members list.