This 15-minute hands-on tutorial shows you how to plan for revenue and expenses so you can see how business processes impact the bottom line in Financials. You set up assumptions for driver-based, trend-based and direct input accounts in Financials to drive revenue and expenses and to help determine which courses of action are more profitable. Furthermore, you can compare plan vs actual to analyze variances and you can analyze the detailed plans from each business process to determine which are more profitable. The sections build on each other and should be completed sequentially.
Background
Financials delivers tools to help you quickly develop plans and forecasts, and generate core financial statements such as balance sheets, cash flow statements, and income statements for internal analysis. Financials provides these components that you can enable incrementally to best meet your business needs:
Revenue / Gross Margin
Expense
Balance Sheet
Cash Flow
Income Statement
Analysis
Financials provides a framework that uses driver-based, trend-based, and direct-input accounts that fully integrate with your income statement, balance sheet, and cash flow statements.
You leverage the data on the income statement, specifically your plans for revenue and expenses, to determine the more profitable courses of action.
What do you need?
An EPM Cloud Service instance allows you to deploy and use one of the supported business processes. To deploy another business process, you must request another EPM Enterprise Cloud Service instance or remove the current business process.
Have Service Administrator access to EPM Enterprise Cloud Service. The instance should not have a business process created.
Upload and import this snapshot into your Planning instance.
Before you can open dashboards and forms, you must set values for user variables.
User Variables were added when the business process was created. User variables act as filters in forms, enabling planners to focus only on certain members.
On the Planning home page, click Tools, then User Preferences.
Under Preferences, click User Variables.
For each variable click its "Member selector" icon () to set the variable's value as specified below:
Currency: USD
Entity: Sales US
Reporting Currency: USD
Scenario: OEP_Forecast
Version: OEP_Working
Years: FY20
Expense Account: OFS_Total Expenses
Expense Drviers: OFS_Expense Drivers for Forms
Click Save.
When prompted, click OK.
In the upper right, click (Home) to return to the Planning home page.
Planning for driver-based revenue
On the Planning home page, click Financials, then Revenue.
To the left of the dashboard, click ( ) Driver and Trend Based.
For driver-based revenue, you enter assumptions in the "% Increase/(Decrease)" column, and make adjustments in the "Adjustment (+/-)" column. For example, to make a 4% increase in the volume and an additional 36 dollar increase in the average selling price:
For Volume, in the % Increase/Decrease column, enter 4%.
For Average Selling Price, in the Adjustment column, for YearTotal enter 36.
Make sure that the POV is set to Forecast, Working, USD, Sales US, FY20, Smart Phone 4 in, and US Market. If you need to change the POV, be sure to click () Go after making changes.
Expand YearTotal to display quarters.
Now, you can enter adjustments at a more granular level.
For example, you can specify that the additional 36 dollar increase in the average selling price will be done in the last three months of the fiscal year. Select YearTotal and delete the value. For Average Selling Price, In Q4, enter an adjustment of 36.
You can also enter more specific data for each month in Q4. Expand Q4. For Average Selling Price, for Mar and Apr, enter 35, and for May enter 38. The average selling price for the quater and year is automatically calculated.
In the form toolbar (not the dashboard), click (Save).
In the Information dialog box, click OK.
The calculated total from assumptions based on the prior year’s average plus the 4% increase in volume and year totals are displayed.
You can also view the updated calculation in the graph below the data. Click the Gross Profit link to drill down the data.
The graph shows Total Revenue and Total Cost of Sales for each month.
Reviewing calculated revenue
Click the Driver Based Revenue tab.
The calculated data based on the data entered on the previous page is displayed for Product Revenue and Total Revenue.
You can also enter additional adjustments on this page in the "Adjustment (+/-)" column.
Click the Revenue Trends tab.
Revenue Trends displays variances between years, periods, and scenarios. You can find the prior year and current year’s trends on this page. You can create reliable future plans by basing them on trends.
Click the Total Revenue - Forecast tab.
Calculated variances are displayed on this page.
Entering data manually
For accounts which you cannot plan based on drivers or prior year, current year, or trend-based values, you can manually enter or edit data. For example, the shipping department provides an estimate for freight that may be entered manually.
On the left, click ( ) Direct Entry.
Scroll to the right to display the months of Q4 and YearTotal.
Enter values for Freight: 480k in YearTotal.
Click Save.
Expense planning
For Expense planning, you can follow similar procedures when entering driver, trend, and manual data.
Click the Expense card.
On the left, click ( ) Driver and Trend Based.
For driver-based expenses, you enter assumptions in the "% Increase/(Decrease)" column, and make adjustments in the "Adjustment (+/-)" column.
On the left, ( ) Direct Entry.
Here you can manually enter or edit data for expenses which you cannot plan based on drivers or prior year, current year, or trend-based values.
On the left, click ( ) Income Statement. Here, you can review Income Statement plan data as well as variances between years, periods, and scenarios. The plan data automatically flows to the pre-configured Income Statement.
) to set the variable's value as specified below:
(Home) to return to the Planning home page.
) Driver and Trend Based.
) Go after making changes.
(Save).
) Direct Entry.
) Income Statement. Here, you can review Income Statement plan data as well as variances between years, periods, and scenarios. The plan data automatically flows to the pre-configured Income Statement.
