Make your five-year forecast rock
March 31, 2016 – Mike McCann
While everyone else works on their own budget requests – and thinks up new projects if the economy is hot – most Finance Directors try to keep finances on a sustainable path. Building a solid five-year forecast goes a long way towards keeping it real.
Trends have to be extended, informed by known future events, and bent to match the latest macroeconomic forecasts and local business conditions. A conservative and authoritative five-year forecast is a normal part of budgeting, the GFOA awards process, and the Finance department’s work product.
Still, no matter how strong your five-year is, if you can’t get it in front of the executive team and budget preparers at the right time, it will not have the impact it should.
This is where your OpenGov platform can give you an edge. Many finance shops use the platform to share their financial and budget history, current variances, and even the budget being worked on right now. OpenGov Intelligence users have a powerful tool at their fingertips for sharing their five-year forecast.
Here’s the secret: OpenGov is data agnostic. It does not care whether the data comes from the ERP, the budget, or right out of your Excel five-year forecast worksheet. If you are working with GL account numbers and you have a table with full account segments and amounts, you can drop it onto the platform, create and share a special report, or add it to an existing one, in less time than it takes to get a fresh cup of coffee from your favorite barista.
There are a couple tricks to making this work.
- First, you do not have to budget at the object level to share your forecast. Just forecast as normal, at the summary level you normally work with.
- Second, simply select common revenue and expense objects to use as a placeholder for each department or fund detail in your forecast. (Sales tax and regular salaries usually work).
- Third, update your data table to include those placeholders so you have a full string for each department to upload and add to a report.
- Your report will look and act just like normal until you drill into the object detail. If you want to get fancy, you could even use the platforms masking functionality to summarize the data and focus on the story you need to tell.
- Doing this with existing reports lets you contextualize information with the historical data already contained in that report, and would push the five-year forecast out to all of the report’s authorized viewers.
Creating a quick new report to share your forecast would let you add just the history you want for this purpose and set permissions to give access to only whomever needs to see the report.
Mike McCann moved into government service in Ukiah, then Monterey CA, after beginning his career in corporate (ADP, Wells Fargo Bank, Blue Shield of CA), not-for-profit (Blue Shield of Ca, Mendocino Private Industry Council), and start-up accounting. For the last 20 years, Mike has been hands-on with budget, financial reporting and accounting operations, including City budgets and CAFRs. He holds a B.S. in Accounting from SJSU and M.S. in Instructional Technology from CSUMB.
Contact Mike with questions or comments at firstname.lastname@example.org.
Category: Product Advice