Individual accounts may be spread in a straight line based on a sum

Description

This feature allows users to distribute a total sum across various periods, providing valuable insights for financial planning and decision-making processes. This typically means entering in a value for the year and having the system simply divide that by 12 to populate the months.

Example Use Case

Scenario: A manufacturing corporation is using CPM software for its annual budgeting process. The company wants to plan its production costs for the next fiscal year, a sum of $600,000 that needs to be spread evenly across 12 months.

Solution: Using the straight-line spreading feature, the software automatically distributes the total sum, assigning $50,000 as the cost for each month. This enables the finance team to have a standardized and clear depiction of the expected monthly expenditure, aiding in efficiency in the planning process.

Considerations

This is the simplest way to breakback a sum for a period where we simply divide the sum by the number of children. For example, in a daily model for October, you would divide by 31.

Overall, this is useful to fill up cells in a budget but does little for accurate budgets if there is even a hint of seasonality. Use this for expense items like telephone charges or internet connection fees.

Questions to Ask a Vendor

Simplicity: How simple is the process of spreading a total sum across individual periods in your system?

Mass Application: Can we apply this to many accounts at once, or do we have to apply it account by account?

Updates: Will the straight-line adjust if actuals are changed?