Background
In advanced corporate planning processes, there are situations in which a plan may no longer be changed.
These are often approved annual budgets or plans that were, for example, submitted to banks or funding agencies.
The purpose of approved plans is always that, at a later point in time, it should be possible to report how actual business development compares to the approved plan.
This is known as plan-vs-actual variance analysis.
In financial planning (as P&L and balance sheet planning), this is not a challenge. Liquidity planning is different. The essential character of liquidity planning is that the outlook should always be up to date in order to detect bottlenecks early.
Mapping advanced planning processes in COMMITLY
This interplay of static (approved) plans and dynamic (always up-to-date) plans can be easily represented in COMMITLY.
In COMMITLY, plans have 3 different statuses:
Forecast - always up to date, always editable
Plan (draft) - editable
Plan (committed) - not editable
The function of a committed plan is to fix an approved annual or multi-year budget, for example, in order to enable deviation analyses in the sense of controlling at a later point in time.
That is, to be able to answer the question in August, for example: How are we actually doing compared to the budget approved at the beginning of the year?
This is not possible with the forecast, since it is always adjusted to the current situation.
To fix an approved plan, you simply need to commit it.
Clicking the gear icon opens the side panel “Manage Plans”. Clicking the name of the plan (or the gray arrow to the left of the name) opens the detail field.
Effects of "committing"
“COMMIT NOW” has the following results:
The name suffix (draft) is removed
The plan can no longer be changed
In addition, you have the option to choose this plan as the new basis for the forecast. If you want to replace the forecast, select YES, OVERWRITE FORECAST.
Caution, this action cannot be undone.
PRO TIP: Do not be afraid of this step. A committed plan can be set to “inactive” at any time, or a new plan can be created based on a committed plan or, even better, based on the forecast.
The big advantage of committing, however, is that plans that were, for example, developed in a team or submitted to banks or investors are fixed. This makes it possible to monitor cash flow at any time and thus to track success.