Individual accounts may be spread proportionally based on a new sum and compared to prior year actuals

Description

This means that users should be able to populate a budget line, such as Hotel, using data from the last period with an adjustment. It also requires that the system allow users to enter a value for the year, then have that spread back automatically based on the prior year's proportionality.

Example Use Case

Scenario: An international retail company is using a budgeting tool for its financial planning. Every year, the company adjusts its budgets based on the prior year's actual performance and the projected goals for the new year. For some accounts they'd like to leverage last year's data +5% growth. For other accounts, they have a firm goal in mind and would like to have the system automatically breakback the number.
Solution: The CPM software allows the users to manually enter a new budget sum, and it then automatically spreads this sum across the individual accounts based on the proportion of the prior year actuals. For other accounts, they're able to simply add 5% to the prior year's results. This gives a fair and accurate representation of the intended allocations, considering historical performance and future expectations.

Considerations

This is a great feature for quickly populating a budget while respecting the seasonality of the data. Products with this feature can look at a specific account and populate budget values to the preceding quarters, months, weeks with some sort of adjustment (percentage, dollar amount) in an instant. There are usually many methods, with proportional breakbacks being very common, along with simply adding a value for the year and asking the system to split it for the 12 months.

Some tools take this a step further and allow the user to apply the spread to many accounts at once. This makes budgeting for a department a snap. At minimum, it can be used as a guideline for the budgeter as they enter their information.

Questions to Ask a Vendor

• Functionality: Does your system provide the functionality to automatically spread individual accounts based on a sum? Can I also apply an adjustment to prior year?
• Seasonality: Is the system able to analyze past performance and spread values proportionately based on those values?
• Exceptions: After spreading values, can I modify an individual month without it getting overwritten by the spread?
• Flexibility and Automation: How flexible are the options for spreading individual accounts? Does the system automatically update the spread when changes to the source data are made?