Actuals vs forecast we previewed earlier is now released and available to our Business and Pro subscribers!
This long awaited feature allows you enter your actual data, lined up against your Brixx financial forecast and then compare the results in detailed variance reports.
Check out the video below for an overview of how it works:
Video transcript – How to use Actuals vs forecast
Welcome to this run through of actuals vs forecast in Brixx. In this video I am going to show you how to enter your actual data into Brixx.
So what is this all about? The basic principle is that you can look at what’s going well in your business and what isn’t going so well and compare this to your original predictions in your Brixx plan.
So it doesn’t just show you how well your business is performing but it puts your original assumptions to the test. You could have made critical business decisions based on your forecast. You need to see where your forecast varies from reality to help re-evaluate any of these decisions to ensure they are still correct.
Alright let’s take a look.
Using the variance reports
I’m in the reporting area of my Brixx plan and here I can tick this ‘show actuals’ checkbox to display additional actual data alongside my forecast.
I’m looking at my cash flow forecast at the moment. When I turn on actuals you can see the first 3 months have my actual data associated with them already. I’ll show you how this data got there in a minute. This additional information appears in the row below the account they are being compared with.
At the top of my cash flow is the cash received account which is all the cash I received from my sales. Below it, you can see my actual result with a percentage number showing the difference between them.
As per normal with a Brixx report you can drill into the account to reveal the activities coming from your plan. In this example plan, my sales are split down by different channels and you can see my predictions for how each would perform against how they really did in reality.
It’s here, as I drill down, that I can analyse what is going well vs what isn’t – which is what this process is all about. Actuals are entered at the most detailed component level and then Brixx totals up the groups, sections and accounts and calculates the comparison at each of these levels for you.
To use a buzzword, it’s going to give you insights about how the different parts of your business are performing and not just a top level figure that you can’t easily trace.
Doing this comparison exercise will help inform your decision making process. If you are regularly checking Brixx and analysing your progress it will help you think more strategically about your business.
I can use the frequency control in the top right to change this variance report from monthly to quarterly or yearly and Brixx will total up your results automatically. So you can do larger reviews at these points in time if you want to as well.
Entering your actuals
So, how did I create these variance reports?
Your forecasts are built by the components in your plan. These components allow you to set assumptions around what you’re doing which automates the completion of all reports at the same time. Since we are now dealing with real results and not something based on assumptions we need to use a slightly different method of entering this information. For example the cash result for a specific source of income might be recognised at a different time to the revenue for the same source of income over on your profit & loss. So we provide the option to enter this separately on both the cash flow and the profit & loss.
Head over to the actuals tab in the menu and you will find this method of data entry split out by the 3 key financial reports – Cash flow, profit & loss and balance sheet on these tabs.
To begin with, you don’t have to fill out all of them if you don’t want to. It might be that cash flow is all you are interested in tracking so it’s completely fine to just fill in this tab and leave the others blank if they are not useful to you. If you are interested in the complete financial picture and you have all the data easily accessible then you could fill in all 3 tabs. It’s up to you how you want to use it and what your business needs to see.
Looking down the page, you can see several grids split by account heading. Remember we were looking at cash received earlier at the top of the cash flow – you can see that heading is also here at the top. The entire page is an exact mirror of the cash flow report. Every heading you see there will appear here in the same order.
This is the same when we go across to the profit & loss tab or the balance sheet.
Underneath each heading, you can then see the components from your plan.
Now, if you have built a large and detailed plan you might be thinking there is a lot to type out. In reality, this should only take a few minutes of your time at the end of each month since you are only dealing with one column at a time.
We also have a couple of techniques to help speed up the process. Firstly, you might have noticed that each cell already has a light grey number in the background even though I have not entered any data yet – this is the number you originally forecast. It’s there to help orientate you so you aren’t just facing a blank spreadsheet. Everything is all lined up for you, ready to go, to make data entry as painless as possible.
All the items on this page are in exactly the same order as your plan. If you reorder your plan, the structure here will adjust automatically too. If you have anything turned off in your plan, they won’t appear here.
Now, if I scroll down to Cash Paid on Goods and Services – remember, this is another heading from our cash flow and it’s where many of the costs to your business sit – down here I know I have a large chunk of fixed costs. I know for a fact these are exactly the same as my forecast. Things like rent, internet bills, software subscriptions, the predictable stuff that rarely changes.
Here is a quick way to fill them out.
When I double click on a cell, the forecast value appears highlighted. Now if the actual results were different I can just type over it. If it’s the same, as in this case, I can just press return on my keyboard and it will confirm the value, move to the next cell down and highlight the next number.
As you can see, I can just hit enter several times to speed through these fixed costs. You may find a sizable portion of your entries are the same. Things like loans with repayments that have been agreed in advance you’ll be able to just double click and press enter on each month.
Going back up to cash received, I’m now dealing with sales results which are a bit less predictable. Here, I’m going to copy and paste from a spreadsheet. My spreadsheet is already setup such that my sources of income match the level of detail my Brixx forecast is in and is also in the same order so I can just grab the numbers and insert them in Brixx immediately.
So if you can get a spreadsheet output setup like this from whatever you are using to record your sales transactions it will save you a bit of time when you go through this process each month.
If it’s hard to modify your data source remember it’s easy to reorder items in Brixx. Drag and drop items in your plan to change their order if that makes it easier to copy and paste items from a spreadsheet.
On the cash flow, just make sure that when you copy in results, and this is relevant to everything you enter on this page, that the figures exclude any taxes you took in the transactions. Taxes are recorded separately down the bottom of your cash flow, just like in the forecast report. It’s really important to account for them separately as you will need to pay this amount to the government later on.
It might mean you have to do some extra juggling with your figures but we enforce this good practice method here because the tax bill is something that catches many businesses off guard if they are not focused on it.
Finally, if a completely new activity occurred in reality that wasn’t forecast at all this is very easy to add. Let’s say you took on a brand new, unexpected type of cost. Perhaps you purchased a subscription to a new software tool that you want to see in it’s own line. For this example, all I need to do is add an operational cost to my plan where I want it and leave it blank.
This now appears in my actuals data entry tab, I can fill in the cost as per normal. When I head back to the variance report once more I can see this has been represented as a new line where the forecast is blank and the actual has the correct value I entered.
You then have the option of entering this new cost in your forecast going forward.
The same process can be applied for any unplanned activity. If you purchased a new asset like a computer then you can add a new asset component to the plan.
Once you have completed a month of data, you can head back to your reports to see the results. Remember you can share this plan with as many viewers as you like, not just your team members and viewers will be able to see these variances reports too.
You’ll also see your final cash result compared in the dashboard chart as well. Hovering over the cash line with show you the actual result and the forecast.
Whether you are presenting to an investor or just keeping your team up to speed on results this is a key tool for any business looking to drive growth through decision making informed by data.
Thanks for watching and I’ll see you in the next video!