Adjusting the automated starting forecast

In this article:

• Step 1: Update the Revenue entries
• Step 2: Update the Direct Cost and Expense entries
• Step 3: Add Personnel entries
• Step 4: Add future Asset entries
• Step 5: Add Financing entries
• Step 6: Taxes, Dividends, and Cash flow assumptions

If you've started LivePlan through the Dashboard, and connected LivePlan to your accounting solution, then you'll see that LivePlan has also used your accounting data to create a starting forecast using one of two methods.

• If you have at least 13 months of actuals, LivePlan will automatically calculate a rate of change based on the overlapping months between the current year and the prior year, and then apply that rate of change to the subsequent years of your starting forecast. 
• If you have less than 13 months of actuals, LivePlan will still generate a starting forecast. But it will use the most recent available values and copy them year-over-year as your starting forecast.

The starting forecast is just that - a starting point. Whichever method was used by LivePlan to calculate it, further edits to the forecast must be done manually. You'll want to make your forecast more strategic by making some adjustments and additions.

Below is a checklist of the updates you'll want to make to this starting forecast. Each item has links to more detailed instructions.

Note: LivePlan Premium adds the ability to forecast change based on a percentage instead of a number, which can be very useful when updating any section of the forecast - for details, read Forecasting annual change percent.

Step 1: Update the Revenue entries

Revenue streams are the lifeblood of any forecast. LivePlan utilizes 4 different types of revenue streams:

• Unit sales: Revenue generated from selling individual product units, such as a bike.
• Billable hours: Best for services that are billed hourly.
• Recurring charges: Revenue occurring from regular, periodic charges like memberships or subscriptions.
• Revenue only: This is for entering a flat revenue amount without additional details.

When adjusting revenue, think about the growth rate appropriate for each stream and how market demand might change during the period you're forecasting. For example, a SaaS business might want to gradually increase monthly subscriptions, while an event planning business should account for peaks during wedding seasons.

Step 2: Update the Direct Cost and Expense entries

You'll also need to make some adjustments to the Direct Cost and Expense pages of this starting forecast. 

You may want to add some additional entries as well. These pages should be helpful:

• Entering direct costs
• Entering expenses 

Step 3: Add Personnel entries

Your salaries and wages from your accounting solution will be mapped to LivePlan, but you'll need to add Personnel entries to your forecast.

Note: If you haven't selected Payroll Expenses as the detail type for your payroll expenses in QuickBooks, then your payroll will be imported to the Expenses page of your LivePlan Forecast as an expense line item. It’s best in that case to delete the personnel line items from the Expenses page, and re-enter them in the Personnel page. Then, you can adjust the mapping between QuickBooks and LivePlan.

These articles cover personnel entries in more detail:

• Entering personnel
• What is the difference between direct labor and regular labor?
• Entering part-time personnel
• Employee-related expenses: changing the Burden Rate

Step 4: Add future Asset entries

You may plan to purchase some durable goods, like equipment or furniture, that will carry value in your business over time. These should be represented on the forecast's Assets page.

If you already have some assets on hand as you begin your forecast, then you'll need to represent their current value in the Initial Balances entry.

These articles offer more details on entering assets:

• Entering initial balances for an existing company
• Entering asset purchases
• What is the difference between current and long-term assets?

Step 5: Add Financing Entries

Next, you'll want to create entries on the Financing page to represent any loans, investments, or lines of credit in your forecast. You can create entries for financing you already have in place as of the start of the forecast, or new financing you plan to take on later. The links below will help you:

• Entering loans, interest, and loan payments
• Entering a loan with a custom payment schedule
• Entering an investment
• Entering a line of credit

Step 6: Taxes, Dividends, and Cash flow assumptions

Finally, you'll need to configure a few automated calculations in your forecast. If you want to forecast a payment back to investors, set up a Dividend entry. These articles offer details on these entries:

• Setting tax rates
• Entering Dividends and Distributions
• Cash flow assumptions

Optional: Adjusting the mapping to your accounting solution

If you've made changes to the forecast categories, you may need to go back to the Dashboard and adjust the mapping between LivePlan and your accounting solution. These pages will help you with that:

1. Adjusting the mapping between QuickBooks and LivePlan
2. Adjusting the mapping between Xero and LivePlan

Note: Adjusting the mapping to your accounting solution WILL NOT update your future forecast automatically as well. Updates to your forecast must be done manually.

Optional: Adjusting the initial balances of your forecast

After LivePlan syncs with your accounting solution, you'll see that LivePlan has used your accounting actuals data to automatically add initial balances to your forecast. The software will insert a month at the start of your forecast for these initial amounts. If you wish to adjust any of these initial balances you can find instructions for doing so at the link below.

• Editing your initial balances