Using OpenAir as a Crystal Ball (aka Forecasting in OpenAir) Jodi Cicci, TOP Step Consulting, LLC V1.0 10/14/10
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Overview: Project Accounting Process Account Setup Project Setup Project Execution Project Accounting Execution Approved timesheets Set up user rate/cost amounts Set up rate cards Set up services/ activities Create Project Create Billing Rules Create Rev Rec Rules Approved expenses Key dates occur Milestones completed Run Billing Run Rev Rec Generate Invoices Integrate to Financials PREREQUISITE FUTURE EVENTS
Overview: Project Accounting Forecasting Process Account Setup Project Setup Resource Forecasting Forecast Execution Bookings Set up user rate/cost amounts Set up rate cards Create Project Create Billing Rules Task Assignments Key dates Run Billing Forecasts Reports Set up services/ activities Create Rev Rec Rules Milestones Forecast Rev Rec PREREQUISITE BASIS FOR FORECAST
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Configuring Forecasting Forecasting is controlled by the charge projections feature To configure and run charge projections, navigate to: Administration > Application Settings > Projects Settings > Charge projections The Status section will tell you the last time that GLOBAL charge projections were run for your account, or that they are currently running.
Configuring Forecasting Charge projection hours can be sourced from: Booked hours Assigned hours Approved hours Worked hours Approved and booked hours Approved and assigned hours Worked and booked hours Worked and assigned hours
Configuring Forecasting Pivot Date Charge projections work from a start date which is also known as a pivot date Dates are defined in one of 2 ways Absolute date range Relative date range
Configuring Forecasting Pivot Date Absolute date range: End date should be in the distant future. Start date is the Pivot Date Relative date range: Start date is either "Today" or "Tomorrow" End date is actually computed based on Duration value
Configuring Forecasting Pivot Date In the time period before the pivot date, actual charges and/or revenue recognition transactions are reported on. Reporting values: Projects Project billing Projects Recognized Revenue In the time period after the pivot date, charge and revenue projections are reported on. Reporting values: Projects Projected billing [rules] Projects Projected Revenue [rules]
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Charge Projection methods Approved hours Pros Cons Provides forecast of actual billing/revenue Limited forecast timeframe and is only accurate to approved timesheet entry Worked Hours Pros Cons Provides forecast of actual billing/revenue based on current timesheet entry Limited forecast timeframe and only accurate to timesheet entry
Charge Projection methods Booked Hours Pros Cons Provides forecast of based on resource management Can be categorized by booking type for inclusion/exclusion in forecast Each booking has a start/end date and effort which allows variable resource planning Forecast is reliant on accuracy of bookings Timesheet actuals are not considered requires attention to actual vs. booked hours burn
Charge Projection methods Assigned Hours Pros Cons Provides forecast of based on resource and task management May align easily to detailed project management WBS plans Forecast is reliant on accuracy of task setup including dates Timesheet actuals are not considered requires attention to actual vs. assigned hours burn Each task assignment has a start/end date which spread assigned hours evenly between dates (split periods an use on exception) Effort may be assigned by person Effort may be at task level and spread across assignments
Charge Projection methods Approved & Booked hours / Approved & Assigned hours / Worked & Booked hours / Worked & Assigned hours Pros Cons Provides forecast of based on resource and task management Considers actual time to replaced booked/assigned hours refines forecast based on actuals Timesheet hours only replace assigned or booked hours for specific day of time entry
Charge Projection methods Approved & Booked hours / Approved & Assigned hours / Worked & Booked hours / Worked & Assigned hours PRIOR CHALLENGE SOLVED!!! Challenge: Any booked/assigned hours on a date with no time entries to replace will continue to be used for forecasting (until pivot date moved forward) Example: 10 hours over 5 days = 2 hours/day forecasted 10 hours worked on day 3 would inflate forecast due to blank time entries not overriding planned hours Plan 2 2 2 2 2 10 Actual 0 0 10 0 0 10 F/C 2 2 10 2 2 18
Charge Projection methods Approved & Booked hours / Approved & Assigned hours / Worked & Booked hours / Worked & Assigned hours PRIOR CHALLENGE SOLVED!!! Solution: Activate the job code override feature in OpenAir and set job code inheritance to User level only Forces 0 time entries to replace planned hours Provides more accurate forecasting
Billing/Revenue Rule involvement Charge projection method leverages forecasted hours against rule setup on projects Fixed Price milestone/date rules still use date Fixed Price % complete rules compute based on hours plan (budget, planned, etc) and f/c hours Expense no forecasting Purchases no forecasting Time Billing various options
Time Billing Rate Methods User rates are easily handled in all forecast methods Service forecast works with Assigned hours due to service association with task Booked hours as long as the billing rules setup with service Job Code works with all forecast methods unless job code override function activation When using override on bookings, the forecast computes correctly with bookings; challenges may exist for actual billing When using override on tasks, the forecast computes correctly on assignments and support actual billing on any time entries
Time Billing Rate Methods Filter use on time billing rules User filter handled Job code filter handled Service filter handled Time type filter May incur 0 value forecasts due to missing values for Bookings or Assignments May incur unpredictable values with other options Task filter Handled easily by Assignments With Bookings, may incur 0 value forecasts if bookings not done to task level Approach to handle 0 value potentials: Setup a 'FORECAST ONLY' time billing rule with conservative rates and no filters or add 'no xxx' value When running billing, forecast rule should not run
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Forecasting Frequency Charge projections may be setup to run on a regular basis in a batch process (auto-run) Checking Automatically run the charge projections and entering a specific date and time. Best practice: setting up global charge projections to run during non-business hours. Individual project forecasting can be generated dynamically (tips area of properties form on project) Internal switch Role based permission
Forecasting Frequency It is important to choose the correct pivot date for your company and business practice: Daily Pivot Date Relative range Weekly Pivot Date Absolute range Monthly Pivot Date Absolute range Historical Pivot Date (never changes) - Absolute range Pivot date limitation related to billing rule caps actual billing and forecast hours double counted toward cap Actual billed hours or money considered from billing transactions Time from pivot date forward then considered against cap If weekly or monthly pivot date not used, actuals from billing transactions considered then ALL time as of pivot date considered (regardless of having been processed for billing)
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Projected Billing Common scenario You want to forecast how much you will bill over the next few weeks, months, or rest of the year, based on projects and billing scenarios currently set up in OpenAir. OpenAir has a number of built in reporting values for projection purposes. In order to use these values, you must: Create billing rules in OpenAir Run charge projections
Advanced Option: Straight Line Billing Projections Overview You can create straight line billing projections based on project budget amounts, start dates and end dates This feature allows you to view projected billing for projects that may not have task assignments or booked users Common use For projects in the proposed project stage that have limited project or resource data Note: All billing rules will be ignored for projection purposes
Advanced Option: Straight Line Billing Projections Budget January 1 through April 30 Start Stop $25k $25k $25k $25k Jan Feb Mar Apr $100k
Advanced Option: Straight Line Billing Projections Budget January 1 through April 30 = 84 days Each day = $100k / 84 = $1190 Start Stop 20 20 23 21 $23.8k $23.8k $27.3k $25k Jan Feb Mar Apr $100k
Advanced Option: Straight Line Billing Projections Setup for straight line billing projections Project stage custom checkbox field: straight_line_billing_projections Once created, you can enable straight line projections per-project stage, by navigating to: Administration > Application Settings > Projects Settings > Project Stages > Select a stage > Check the box and Save. Note that the system calculated project end date will be used unless you create the custom date field: project_end_date
Projected Revenue Common scenario You want to forecast how much revenue you will recognize over the next few weeks, months, or rest of the year, based on projects currently in OpenAir. Similar to forecasting billable dollars, forecasting revenue requires Creating revenue recognition rules Run charge projections w/ revenue option
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Forecasting Expenses If using assigned hours: Create a new work schedule for a forecasted expenses generic resource (1 hr/week) with a default hourly rate of $1/hr Override project or task cost for forecasted expenses to be $1/hr Assign the generic to the project for the # of hours representing the total expense costs Task setup Enter in black out periods that make the task schedule expand the duration of the single task Setup 1 task per each expected expense item with dates As the project progresses, users enter actual expenses. The actuals replace the forecasted expenses for the past The projections remain for the future if the Pivot Date is adjusted forward.
Forecasting Expenses If using bookings: Create a new work schedule for a forecasted expenses generic resource (1 hr/week) with a default hourly rate of $1/hr Override project or task cost for forecasted expenses to be $1/hr Create a booking for the # of hours representing the total expense costs As the project progresses, users enter actual expenses. The actuals replace the forecasted expenses for the past The projections remain for the future if the Pivot Date is adjusted forward.
Agenda Overview Configuring Forecasting Charge Projection Methods (Pros/Cons) Forecasting Frequency Billing/Revenue Forecast Forecasting Expenses Reporting Weighted Forecasting
Reporting: Building the Report To report on projected billing and/or revenue, navigate to: Reports > Summary reports > [Account-wide] Company (or your choice of highest level sub-total). Some commonly used projection reporting values include: Projects Projected billing [rules] Projects Projected revenue [rules] Projects Projected deferred revenue [rules] Projects Projected cost [rules] Projects Projected billing margin [rules] Projects Projected revenue margin [rules] Note: You can obtain definitions by hovering over the values or by running an advanced report.
Forecasting date settings Forecasted Revenue dates Recognition transaction dates used even if rule setup to use accounting dates Accounting dates cannot be forecasted Equals
Reporting: Example Report Common scenario: You want to report on projected billing, revenue and cost for the current year.
Calculated fields for Reporting The sum of actuals and projections is your forecast. Can create a custom calculation to report on this value. Based on the forecast method, it is very important to maintain an accurate project/resource plan and time entry for the custom calculation
Forecasting weighted values There are 2 ways to do this: Option 1: Create a weighted forecast based on probability of closing by creating a custom numeric field and a custom calculation. Option 2: Use of custom field type Allocation grids (internal switch). Create allocation grid custom field Activate 'include' on allocation fields on report forms for automated computed weighted values
Summary Leveraging the actual invoicing/revenue features of OpenAir along with resource management automatically positions forecasting configuration Consider pipeline forecasting using straight-line and weighted values Reporting supports custom calculations, weighted allocated grid values, and projected values Graphical dashboards are also extremely helpful to display information at a glance
Want to know more? TOP Step Consulting, LLC is focused on helping you be more successful in running your PS Business Operations We have been in business since 2007 We have served over 45 clients, many of who conduct business operations globally We offer a full range of services to help you be more effective in using OpenAir Check out our website at: www.topstepconsulting.com/answers