Business Intelligence Blog from arcplan
10Apr/130

Essential Budgeting & Planning System Components – Part 4: Supporting Details & Commentary

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If you weren't already familiar with what to look for when buying budgeting and planning software, tuning into this series has shown you that it's a long list! There are many capabilities that should be considered essential to your system. So far I've covered the importance of workflow, spreading, and offline planning. Today I'll explain why supporting detail and commentary should to be added to the mix.

Supporting Detail

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Supporting detail is the content that supports the plan data existing below the system grain. The system grain may be the department, account or cost center level. Supporting details tell an additive story that literally supports the higher level numbers in the plan.

A couple of use cases for supporting detail: (1) Depending on how large your organization is, sometimes the submitted budget values are fairly large numbers. For instance, the finance director may question why you, the VP of Sales, have asked for $250,000 in travel and entertainment expenses for the 2013 budget. Supporting detail capability gives you the opportunity to tell that story below the account level and explain what makes up that number.

(2) Expense figures are often aggregate numbers of several contributing costs. For example, the marketing budget may contain a line for conference expenses. Supporting detail would enable you to build the case for that line item by breaking out the fees for all planned conferences with their associated travel costs, lodging expenses, equipment rentals and conference services. Supporting detail provides context for your data, helping you build and communicate what contributes to corporate expenses.

Commentary – Supporting Detail's Sibling

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The ability for planning users to add commentary is crucial, particularly when that commentary is stored in the database alongside the plan data – not just on the surface level of the planning system. Commentary adds verbose context to plan data and can be used for budget justification, the explanation or description of individual costs. For example, if your budget for in-person training is lower this year because many of the courses can be attended online, that information is considered commentary and should be entered into the planning system.

Changes in the business market, favorable or not, may cause income – and therefore budgets and plans – to fluctuate. Since the numbers alone do not provide a through explanation of occurrences, the commentary feature helps create a meaningful picture and allows planning users to keep track of changes that they likely won't remember a year later. By referencing previously saved commentary, planners are able to make better plans in the future. Additionally, management discussions will not consist of best guesses; with commentary, decision-makers will be able to reference factual accounts of changes from year to year.

There are a couple of things to be aware of when it comes to commentary. First, planners must consider where to hold the level of detail for the commentary, i.e. if commentary should be located at the schedule level, or at the department or account level. The other thing to be aware of is that once you start holding detailed levels of commentary you don't want to lose those details. At arcplan, our application developers implement a system of "commentary journalism," where we can roll up individual commentary elements into reports and dashboards to provide information for management discussions. This ensures that valuable information is retained to support decision-making for future budget planning.

My next post will wrap up this series!  Stay tuned!


arcplan Edge 2013arcplan Edge streamlines your planning process, enabling you to produce accurate, timely budgets, plans, and forecasts. With features like workflow, spreading, allocations, offline planning, supporting detail, commentary, write-back, and an Excel-like interface, it's a powerful yet easy-to-use planning system for businesses of any size. Learn more >>

 

Dwight deVera

About Dwight deVera

I'm Senior VP responsible for Solutions Delivery at arcplan in North America. I also present on a lot of arcplan webinars, so you can sign up to hear me - the events listing on our website is located here: http://www.arcplan.com/en/company/events/. You can also follow me on Twitter: @dwightdevera.
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