Prerequisites
Prior to reading the instructions on the forecast report, it is beneficial to review the below sections to gain foundational information:
Overview
Forecasting refers to the process of using current and historic cost data to predict future costs. The Forecast Report is a management tool that presents financial information (revenue and expense) based on actual and budgeted (projected) amounts within the current fiscal year. The main purposes of this report are for planning and control. While it is not one of the primary financial statement reports, the forecast report has many different uses which are important to the continual financial health of the user’s unit and IU as a whole.
Importance and Impact of Forecast Reporting
Forecasting assists fiscal officers and leadership in projecting future outcomes and/or trends. It allows them to review and predict revenues and expenses for the current fiscal year and ensure actual projections are in line with set budgets. This allows them to implement any necessary operational changes either in the current fiscal year or the next. The Forecast Report is also key in goal setting (i.e. setting target profit or revenues) as it helps project the financial position the entity is projected to finish. It is also used for control, to monitor and keep expenditure under a certain budgeted dollar amount. In addition, the Forecast Report is an important supporting documentation for the rate setting process and helps support expectations for future rates.
How the Forecast Report Works
A Forecast Report consists of seventeen columns, one for each month (i.e. fiscal period), and five that calculate forecast and budgeted amounts. At the beginning of the fiscal year, the monthly or period columns are populated with budgeted amounts and are labeled as budget in the column heading . As the periods close, the budget data is replaced by actual income and expenditures from the closed period. Other columns after the period columns include the Actual through Period X, Remaining Budget, Forecast and Budget.
Below is a screenshot of a Forecast Report column headings ran for period 6, showing the monthly period columns with July to December being actuals and January to June being budgeted figures. The Actual Through Period 6 column sums all figures from July to December while the Remaining Budget sums January to June columns.
The totals for the actual period figures, is summed together in the Actual through Period X column with period X being the last closed period chosen. After the Actual through Period X column, there is the Remaining Budget column, which is made up of the total of the remaining budget (i.e. budget period sum of all the remaining future periods). When added together, the Actual through Period X and Remaining Budget column provides the user with the Forecast column. The Forecast column has the initial Budget column from the entity to the right for side by side comparatives. This helps show users where they are projected to end compared to where they had planned to end side by side. For an illustration of a forecast report, please see the Forecast Report.
The budgeted amount in the budget column is the same as the July 1 budget of the entity which is then spread out into 12 periods. Any current budget adjustments will in turn adjust the budget figures on the forecast report for periods that are not yet closed. Where no current budget adjustments are done, the initial budget (i.e. July 1 budget) will be represented in this column. Monthly budgets allow entities to spread their annual budget into twelve separate smaller budgets . This is important when entities have revenue and expense lines that are not earned or incurred evenly over the 12 months of the fiscal year. For example, football ticket revenue is typically earned in September thru November.
In scenarios where an initial budget was never prepared for the entity, the forecast report will only have closed periods populated with actual data and future periods with zeros. It assumes that since nothing was budgeted for in those periods, no activity is expected. A quick way of checking for whether an initial budget was prepared is by looking at the Budget column for zeros throughout.
Where to Find Forecast Report
The Forecast Report is located under the Controller’s Office Reporting Tools tile in One.IU. Search for “Controller’s Office Reporting Tools” in the search bar. Mark this task as a favorite by clicking the heart icon near the start button. To access the tools, select Start.
Once in the Controller’s Toolkit, users will see all available reporting tiles. Navigate to the Financial Statements folder.
Once selected, a new tile opens, which displays all the available Financial Statement Reports plus the Forecast Report. Select the Forecast Report.
Report Best Practices
Best Practices
- Run the Forecast Report monthly to identify any deviations from the budget and take corrective action in future months.
Running the Report
Define the search parameters to return results relevant to your organization or to a specific account. The table below describes the different search parameters available in the Forecast Report. These are divided into three parameter types: chart of account report parameters, report specific parameters and display parameters.
If there are questions related to running the report, requirements, or reviewing results, please contact your (RC) fiscal officer or campus office. Each campus may have individual requirements related to Forecast Reports, be sure to reach out to the related campus office or fiscal officer prior to period closings.
Users can enter the fiscal year, fiscal period, responsibility center (RC), organization code and account for their respective organization to narrow their report results. If unsure, several of the parameters have a valid values function which displays the available codes and corresponding descriptions.
| Parameters | Description |
|---|---|
| University Fiscal Year | Used to limit report to a specific fiscal year(s). |
| University Fiscal Period | Used to limit report to a specific fiscal period(s). |
| Chart of Accounts | Used to limit report to one or more specific chart of accounts. For assistance determining your chart code, refer to KFS chart report. |
| Responsibility Center Code | Used to limit to a specific RC. Users are encouraged to use this parameter in conjunction with a chart of accounts code. For assistance determining your RC code, refer to KFS RC report. |
| Organization Code | Used to limit report to a specific organization code. Users are encourage to use this parameter with in conjunction with a chart of accounts code. |
| Account Number | Used to limit report to one or more specific account(s). |
| Sub-Account Number | Used to limit report to one or more specific sub-account(s). |
| Fund Group | Limits report to specific fund group(s). |
| Sub-Fund Group | Limits report to specific sub-fund group(s). |
A report specific parameter is a parameter that is limited to a single or small group of reports. For example, on the Forecast Report users would expect to see a parameter of Subtotal Options but that is likely not going to be applicable on the majority of other reports. The table below describes the different report specific parameters available in the Forecast Report.
| Parameters | Description |
|---|---|
| { glossary.link('report','fin_org_hier_cd ','Organization Hierarchy ') }} | The organizational hierarchy presents the financial data based on organization code and provides a high level review of the data at a more consolidated level. |
In many cases an organization reports directly to another organization. By selecting the organization hierarchy, users will be able to see all data from the selected organization plus any organizations that report to the selected organization. For example, Bloomington off-site services (BA-SERV) reports directly to Bloomington Consolidated Auditorium (BA-AUTC). When running the forecast report for BA-AUTC with the organization hierarchy selected, information for both organizations will be consolidated into the report. |
| Subtotal Option | The subtotal option is used to show subtotals within the forecast report at different levels:
- No Subtotal by Object Code – presents financial information at a high level in a consolidated format such as net income (loss) subtotal.
- Subtotal like Income Statement - organizes subtotals similarly to the Income Statement which is shown at the object level. Users are recommended to use this option as it is easily comparable to the Financial Statement Report.
- Subtotal by Classification by Object Code – this provides information at the highest level of detail by showing subtotals of all the revenue object codes together and similarly, the expense object codes together. The net income or loss, is the final subtotal.
The below is an example of the report specific parameters as it is presented on the Forecast Report when all parameters are selected.
Display parameters determine how your report results are displayed. These options are available under the search parameters. Available display parameters related to the Forecast Report include the following options:
| Parameters | Description |
|---|---|
| Display Materiality | Check/Uncheck – displays the materiality of the financial statements at the end of the Income Statement. Mainly used for variance analysis and is calculated at 10% of the total revenue in the specific report. |
| Show Zero Balances | Check/Uncheck – shows object codes that have been used in the past but have had zero balances in the specific years the user has selected. |
| Include Accounts Page (Cover Page) | Check/Uncheck – includes a cover sheet tab showing all the accounts included in the reports. |
| Include Closed Accounts | Check/Uncheck – includes the accounts closed during and in prior periods. Users are encouraged to check this box especially for comparative periods. |
| Include Current Period Data | The current period parameter is used to limit level of detail required in the reports: 1.Current Period Only - includes only activity during selected period. 2.Thru Current Period - includes activity through the period selected. 3. Both - includes both Current Period and Through Current Period columns within a single Income Statement report. |
| Report Style | The report style parameter is used to limit level of detail required in the reports: 1. Consolidated – presents financial information in a consolidated format for the display level requested i.e. organization or account. 2. Detail by Account – higher level of detail showing the different accounts separately. 3. Detail by Account and Sub-Account – Highest level of detail showing different sub accounts within an organization or account separately. Note: users are not able to select detailed levels if the org hierarchy box has been checked – see chart of accounts report parameters above for more detail. |
| Include Hyperlinks in Excel Output | Check/Uncheck – If the user checks include hyperlinks in excel output, the report will include links within the excel version and the user will have the ability to drill down for additional detail. |
| Output Format | Selects whether the report is generated in Excel or HTML format. If a user selects HTML format, the report will appear in a separate tab within the user’s browser and will look identical to the excel version. Output format is based on personal preference. |
| Select the Output Destination | The user has the option to choose where they want their report to go once it is ready. The user can either Wait for it to pop up on the screen or have it sent to their Email. If the user selects email output destination, an email will be sent with the link to you selected output format (excel or html). |