Focus Forecasting - Overview
Focus Chemoil Forecasting (FCF)
Data Model
The main records in FCF are Forecast Items (FCItems). They are based on each Customer and Product.
The delivery of the item can be spread over a number of Forecasting Periods (FCPeriods). The Forecast
values are stored in Forecast Period Items records (FCPeriodItems) which contain the Budget, Forecast
and Actual Sales Values for each Forecast Period. The Forecast Periods are aligned with the Accounting
Periods and the Financial Years.
To provide for high-level summary and multi-level drill down analysis, Forecast Items are allocated to
a number of analysis codes:
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Customer
Trade Classification
Product Code
Product Category
Product Group
Country
Territory
Rep
Manufactured or Bought
Forecasting enables the comparison of Budget, Forecast and Actual values for Volume, Sales, Cost of
Sales and Margin across Forecasting Periods and Forecast Versions.
Budget and Forecast
There is a clear terminology and conceptual distinction between the Budget and the Forecast. The
Budget is set at the start of the financial year and is created by copying the current year’s forecast
(Actual to Date and Forecast for future periods at the copying point) at a designated point to repeat
the items from the current year as the starting point for the next year. This initial budget is then
amended manually to reflect the anticipated activity for the next year.
Once the Budget is confirmed, it is “Locked” and the Budget Values are copied to create the initial
Forecast Values for the Period 1 version of the Forecast.
During the year, as the expected sales change, the Forecast Values are modified and each month there
is maintained a distinct version of the Forecast for the year as it stands at the end of each period.
Actual Sales
The original Budget and the moving Forecast are then compared to the Actual Sales for each period.
This actual sales data is extracted from Focus using the monthly Sales Invoice Lines Data. An initial
view of the actual sales to date each month can be extracted from the Invoice data at any point in the
month but the final values are extracted and updated. Once an initial update of the Actuals is
performed for a period and until the final Month-End “Update Actuals” is performed, the Forecast is
placed in “Review Actuals” mode. This is because the normal display of the Forecast combines the
Forecast Values and the Actual Values to provide a meaningful view of the actual and projected values
for the year as a whole. However, until the month end “Update Actuals” is run, the current month’s
values would duplicate the Forecast and Actual values. The Month End “Update Actuals” creates a
Focus Forecasting - Overview
negative period Forecast Item to effectively clear the Month End Forecast, so that the combined
“Forecast + Actual” Values show the correct Actual values up to the end of the Current Period and the
Forecasts for the remaining periods of the year.
Versioning
Forecast versions are a crucial part of the data model. The concept of the version is that all changes
to the Forecast (Budget, Forecast or Actual Values) are created as incremental changes to the values
and every change is allocated to a version based on the Forecasting Period in which the change is
made.
Versions are designated by the year and period number that the change was made. All the period item
records associated with the Budget values are designated as version YYYY00 (YYYY is the Financial
Year)
When the Budget is “Locked”, the Total Budget values for each forecast item is created as the initial
Version 1 Forecast (its version number is YYY01)
Once the Forecast year is active, the current forecast period is set. This is set as YYYY01 initially. When
a user is logged on, all changes to the period values are allocated to the version number that
corresponds to the user’s forecast period. Admin users can modify their current period, so that they
can view and work on different forecast periods whilst non-admin users are always allocated to the
SYSTEM PERIOD and they cannot change this.
Following the completion of a Forecasting period, an admin user needs to move the SYSTEM PERIOD
to the next period, so that non-admin users can commence work on modifying the Forecast for the
next period, whilst the admin user can continue to review and modify the previous period forecast,
e.g. for the extraction of data and reports. It is important that users are aware of what their effective
forecasting period is as any changes made in a session are “versioned” according to the currently
active forecast period for the user.
The purpose of this versioning method is that it facilitates retrieving different versions of the Forecast
data at any time by summing the period values for each period from version YYYY00 to the required
version number. Any changes made in subsequent Forecasting periods will be excluded when this
method is used.
Multi-Currency Accounts
Forecasting caters for sales to customers in foreign currencies. The Currency is stored on the
Customer’s account, as in Focus Chemoil. For Currency Accounts, the Forecast is maintained by setting
the Sales Volume, Currency Price and Exchange rate data. Sterling values are derived from the
currency values. Future Sterling forecast values can be revalued using the current exchange rate data,
maintained in Focus Chemoil.
Monthly Processing Cycle
Each month the process is as follows:
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Update the Customers, Rep and Product Data from the Chemoil System using the “Tools”
Menu items. This will update any changes to the Customers names etc. and allocate new rep
codes to the Current year forecast based on the Rep assigned to the customer record.
Focus Forecasting - Overview
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Review the Forecast for the Current and Future months
This entails reviewing the various views of the current month and future month’s forecast and
modifying the expected Sales Volumes or item unit Prices to reflect changes in pricing and
customer demand. Price changes are entered in sterling for the non-currency accounts and
the currency price for Currency Accounts. Sterling and Currency Sales and Cost values are
calculated accordingly, based on entered projected Sales Volumes, Sales Prices and current
exchange rates.
Any new customers or new sales to existing customers can be added to the forecast by
selecting the “Add New Item” from the main forecast screen.
A full audit history is maintained of the incremental changes to the Forecast data.
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Review the Actual Sales for the Current month and update the Forecasting model with the
Actual Sales.
Use the “Update Actuals” Menu Item. Select the Current Period and then work through the
following steps:
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Select “Prepare Actuals Data” – This will get all the invoice lines data for the month
and display it. You can review this data at this point.
o Select “Update Actuals Data” - This will match the sales data with the Forecast items
and update the forecast items with the actual sales data (in summary per forecast
item). New Forecast Item records will be created for any new sales that do not exist
in the Forecast.
o Once you are happy that the Actuals data is accurate, select the “Clear Forecast”,
which will clear out the current month’s forecast, replacing it with the actual results.
Once the Actuals have been updated, the System Period should be moved to the following
period. This “Locks” the current period, preventing any manual adjustments and enables the
cycle to be commenced for the following month.
Update the Latest Exchange Rate data and performing a Currency Revaluation, from the
“Tools” Menu items. Use the “Update Exchange Rates” menu to read the latest rates from
Chemoil and the “Exchange Rates” Menu to view the latest rates and perform the Currency
Revaluation. This will recalculate the Sterling values for the Currency Accounts, using the
latest exchange rate data, recording a period item adjustment to the current month and
future month’s forecast to represent the new sterling Sales and Cost Values.
Admin users can view and modify the earlier period’s version of the forecast by changing their
“Current Period” from the System period. Once they have changed their current period, their views
are based on the selected period month end version. If you change your current period, you should
restart forecasting to reflect the change. As a safeguard, when you login you are warned if your current
period does not match the system period.