The forecast in COMMITLY is the rolling liquidity outlook:
It shows day by day how the account balance is expected to develop.
It is the default plan in COMMITLY and the basis for all analyses. It is built on three data sources, which are combined per category.
Actuals
Inflows and outflows actually booked on the connected bank accounts (transactions).
Open items
Payments that are expected but have not yet arrived, for example issued outgoing invoices or received bills.
Plan figures (budgets)
The total amount expected for a category in a period. A budget is a placeholder for payments that do not have an invoice yet, and at the same time the frame for the open items of that category.
The view can be shown per month or per week; quarter and year are also possible.
The default setting (choice: month or week) can be set in the profile: My Profile.
How the forecast is calculated
COMMITLY calculates the forecast per category and period according to a fixed rule:
Actuals and open items are added together. This is the amount that has already been booked or is concretely expected.
If the category has a plan value, COMMITLY compares this sum with the plan value and shows the higher of the two.
In detail, this means:
If only actuals exist, the forecast shows the booked values. No further inflows or outflows are assumed for the future.
If open items are added, they are added to the actuals, so that expected inflows and outflows feed into the outlook.
If a plan value is higher than actuals plus open items, the forecast shows the plan value. The difference is the part of the plan that is not yet backed by bookings or invoices. In the planning table, this progress is visible in the current period as a green bar in the forecast cell.
If actuals plus open items are higher than the plan value, this higher amount counts.
Open items are therefore not added on top of the plan value of the same category, but fill it.
Illustrative example
Situation | Actuals | Open items | Plan | Forecast |
Invoice issued, not yet paid | 0 | 100 | 0 | 100 |
Invoice paid, transaction synced | 100 | 0 | 0 | 100 |
Invoice marked as paid, no payment | 0 | 0 | 0 | 0 |
Planned budget (plan) higher than open items | 0 | 100 | 110 | 110 |
Open items higher than plan | 0 | 100 | 90 | 100 |
Example with two expected inflows
In the category “Revenue”, two inflows are expected in March: EUR 4,000 from an invoice that has already been issued (open item) and EUR 6,500 from an agreed order for which the invoice is still missing.
If only the amount of EUR 6,500 is planned as a budget, the forecast for March shows EUR 6,500. The open item of EUR 4,000 is included in it, not on top of it.
For both inflows to appear in the forecast, the plan value of the category is set to the total expectation: EUR 10,500. The forecast shows EUR 10,500. Once the second invoice is issued, open items and plan are equal.
Rule of thumb: The plan value of a category is the total amount expected in the period, including amounts that have already been invoiced.
Past and future
In the past, actuals automatically replace the expected values as soon as bank transactions are available. Past periods can therefore no longer be planned. A static plan serves for comparisons with the original planning.
In the future, the forecast shows the expected inflows and outflows from open items and budgets.
Month view and week view
Both views use the same forecast logic. The difference lies in the period within which actual payments, open items and budgets are reconciled against each other:
In the month view, the period is the month. A payment on the 5th can fulfill a budget dated on the 20th of the same month.
In the week view, the period is the week. A payment from week 1 and a budget in week 3 belong to different periods and are not offset against each other. The week view starts with the current account balance and only looks forward.
The difference therefore always arises in the current month: past months consist only of actuals in both views, future months only of expected values (open items and budgets).
If an open item and a budget of the same category fall into different weeks in the current month, the week view shows both amounts, while the month view compares both at month level. A higher weekly forecast is therefore not an error, but an indication that something in the current month is not going as planned.
What to do in this case is described in the article Why the projection differs between the month and week view
Importance of open items
The accuracy of the forecast depends largely on how consistently and correctly open items are maintained. If an open item is marked as “paid” although no payment has been received, the amount is missing from the forecast (third row of the table).
A well-maintained forecast
The outlook is only as good as its data: mapped transactions, current open items and plan values that reflect the total expectation of the respective category.
Deviations between plan and actuals are best reviewed at the beginning of the month, see the article “Deviations”.