This article will discuss what-if analyses and modeling that some modern budgeting tools come equipped with for planning with Microsoft Dynamics that acknowledges variables.
Financial planning is a responsibility that involves historical actuals, research-driven projections, goal setting, and collaboration. Depending on your procedure, plenty can change in the course of the period. Therefore, outside of historical figures, the variables in the budgeting process make financial planning a challenging responsibility at times. If you prefer to look at your options and approach budgeting by knowing various outcomes, so you can be adaptable, what-if analytics and modeling offers you exactly that. This article will discuss what-if scenarios and modeling functionality that is built into some of today’s budgeting solutions for Microsoft Dynamics users.
Let’s begin by defining the term, “what-if analysis.” Essentially, what-if analyses translate to a business end user altering values in the budget spreadsheet cells to showcase how specific changes can affect the results of your formulas. Since a lot of organizations are relying on Excel for budgeting, as well as Excel add-in planning solutions, let’s discuss using Excel terminology. As an example, let’s talk about a “scenario,” which is a set of values that Microsoft Excel stores and can utilize automatically in your budget worksheet. You can design and save multiple scenarios on a worksheet, and then you can substitute these sets of values into the financial plan to see the differences in your results. Let’s say that you would like to plan for your best case scenario, worst case scenario, and then, something in the middle. You can bring these three scenarios together on the same spreadsheet and then, quickly and simply switch between them to view what you have to achieve in order to realize the results you set up in your scenarios.
Budgeting is almost never a responsibility for just one person, so professionals at all levels of the organization typically have to bring historical actuals together and researched projections for the upcoming period to establish a financial strategy. If you have more than one person providing specific information in separate spreadsheets that you would like to use for scenarios, you can bring this workbooks together and merge the scenarios. Some of the more modern tools offer password protection that you can distribute, so you can securely collaborate, even with sensitive information. Once you have set up and put together all of the scenarios you want, you can produce a summary report that includes information from these scenarios. This statement illustrates all of the scenario information in one table on a new spreadsheet.
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