Predictive Planning is a powerful feature in Planning and Budgeting that allows users to access historic data and make predictions about the future budget. By utilizing Predictive Planning, you can view trends and growth rate predictions to validate and potentially update budget values. This feature enables a more accurate representation of business performance and supports simplified financial planning.
For example, to update the operating expense (OpEx) budget using Predictive Planning, navigate to the OpEx section and click on the OpEx Predictive/Spread form in the OpEx Planning tab. Select the desired point of view, including subsidiary, currency, and department. In this example, let’s focus on using Predictive Planning to update the operating expense budget for the Employee Meals expense account in the Sales department. Right-click on the account and choose Predictive Planning.
The Predictive Planning form opens.
Time period for the prediction can be set by clicking on the Settings icon and navigating to the Date Ranges tab.
In the Date Ranges tab, you can define the historical data range and the prediction range. The historical data range determines the period to include for historic data, while the prediction range determines the future period to include for predictions. For example, you can select the previous year as the historical data range and the last closed period as the end of the past year. The future periods for this prediction can be set to the current year and the last period of the budgeting year. Apply the changes to save them for the current session.
The Predictive Planning form displays a graph with historic values on the left side and predicted values on the right side. The graph provides options to adjust the predicted curve and individual series points. You can drag the chart grabber to increase or decrease all values relative to the first predicted value or adjust the first predicted period. Hovering over series points or growth rate percentages provides additional information.
Similarly, you can review and update predictions for other accounts by clicking on the account in the budget or selecting it in the Predictive Planning form. Note that the Predictive Planning panel can be collapsed and restored. Predictive Planning is a valuable tool for validating existing budgets, identifying trends, and making adjustments based on predicted values.