Forecasting

On the Forecast Summary you will see Marriage, Engagement and Dating Revenue:

• Marriage – This is revenue where there is a high level of certainty, you are very confident of securing it, there might be a contract in place, you can name the revenue source .
• Engagement – This is revenue you are hoping to secure, you know it is available but is not yet won.
• Dating – This is revenue you cannot define.  It is Aspirational Revenue less Marriage Revenue less weighted Engagement Revenue (it is a calculation and is not entered).

Aspirational revenue is normally the total of Marriage + weighted Engagement + Dating. Once the Aspirational amount is input, the amount goes into Dating. If Marriage or Engagement is updated, dating is updated automatically (the balance of Aspirational Revenue (total) less Marriage and weighted Engagement is the calculated value for Dating Revenue). However, if Marriage is set to greater than Aspirational, Aspirational does not change and therefore does not appear as the sum of the details below it. You need to manually update the Aspirational to the sum of the details.

The reason there is no ability to use percentages of Aspiration Revenue to calculate Marriage or Engagement, is that Marriage revenue is revenue that is certain. That is, it is not a percentage estimate of the total aspiration. So rather than defining a percentage of the total aspirational revenue, you are entering known contracted revenue in each month, for each revenue line. These are revenue amounts that you are sure of.

Engagement revenue is what you are hoping to achieve but is not yet won. You have the ability to enter the total possible opportunity and then weight that total by your expected percentage of converting. Engagement revenue can be turned into Marriage revenue when the contract is won, or the revenue becomes certain.

The balance of Aspirational Revenue (total) less Marriage and weighted Engagement is the calculated value for Dating Revenue.

If you have more than one RealTime CEO account, you may also have a Group account that consolidates the individual companies.

This Group account does not consolidate the Forecasts of the individual companies.  The reason for this is that it gives the user the choice of forecasting at the Group level or the Individual company level.

When forecasting is enabled, the software generates some initial numbers based on historical data.  These numbers need to be assessed and updated.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Aspirational Revenue line.
3. Click Reset Aspiration to set the next 12 month’s revenue forecast amount.  RTC displays the past 12 months actual revenue.
4. Select whether to enter the yearly amount as a Percentage of last year’s revenue, or by Manually entering it.
5. Enter either the amount or percentage, depending on the method chosen.
6. Click Next.
7. Select whether to split the 12 month revenue forecast Evenly over the months, or set it to the Seasonal shape of the past 12 months.  You will have the ability to update the amounts afterward.
8. Click Accept & Save.
9. Optionally adjust the monthly amounts either by Percentage or amount (Final Target) if they need updating from the system calculations.
10. Click Accept & Save.

Once the Aspirational Revenue target has been set, this can be split into revenue certainty levels.  There are 3: Marriage, Engagement and Dating.  See What is Marriage, Engagement and Dating Revenue?

Marriage revenue allows you to set up unlimited sources of revenue (these can be specific contracts).

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Marriage Revenue line.
3. Either create a new revenue source, or go to Step 5 to update an existing revenue source:
   1. Click + Add new revenue source to add a new source of revenue.
   2. Enter the name of the Revenue source.
   3. Click + Add new revenue line to add the type of revenue to this source. Either select from the list of revenue types already used, or enter a new one.  Repeat this for each revenue type.
   4. For each revenue type, enter the monthly forecast revenue amount. Note the Fill button allows you to copy the amount entered to each month.  You can then manually update individual months as needed.
   5. Click Accept & Save when the Revenue Source is complete.
4. Repeat Step 3 to add other revenue sources.
5. To update an existing revenue source:
   1. Click the Edit pencil next to the source.
   2. Type over the amounts to update them as needed.
   3. Click Accept & Save.
6. Click Done when all the Marriage Revenue Sources have been created/updated.

Once the Aspirational Revenue target has been set, this can be split into revenue certainty levels.  There are 3: Marriage, Engagement and Dating.  See What is Marriage, Engagement and Dating Revenue?

Engagement revenue allows you to define possible revenue and a certainty percentage.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Engagement Revenue line.
3. Either create a new revenue source, or go to Step 5 to update an existing revenue source:
   1. Click + Add new revenue source to add a new source of revenue.
   2. Enter the name of the Revenue source.
   3. Click + Add new revenue line to add the type of revenue to this source. Either select from the list of revenue types already used, or enter a new one.  Repeat this for each revenue type.
   4. For each revenue type, enter the monthly forecast revenue amount. Note the Fill button allows you to copy the amount entered to each month.  You can then manually update individual months as needed.
   5. Enter the Certainty of receiving the revenue as a percentage.  Note you can select to enter a Certainty for all months (the same percentage) or for each month by clicking on the Certainty drop-down. The Weighted Revenue (Certainty % x Revenue Amount) per revenue type will be displayed.
   6. Click Accept & Save when the Revenue Source is complete.
4. Repeat Step 3 to add other revenue sources.
5. To update an existing revenue source:
   1. Click the Edit pencil next to the source.
   2. Type over the amounts to update them as needed.
   3. Change the Certainty percentage if required.
   4. Click Accept & Save.
6. Click Done when all the Engagement Revenue Sources have been created/updated.

Direct Costs are forecast by revenue type (Marriage, Engagement, Dating), in 4 components:

• Wages
• Materials
• Depreciation
• Other (anything not in the above categories)

If you do not use Marriage and Engagement Revenue, Direct Costs will all be forecast at a single revenue type (Dating).

They can be entered as a percentage of revenue or a manual amount.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Direct Costs line.
3. The revenue types set up under either Marriage, Engagement, and Dating revenue display (if you do not use Marriage or Engagement, only Dating will display).  Click the Edit pencil on the revenue type to be updated.
   1. The screen shows the forecast for the revenue type and shows the Total Direct Costs forecast using a percentage for the past actual 12 months.  This can be updated as follows:
      1. For each component (Wages, Materials, Depreciation, Other), enter either a percentage of revenue or an amount (one will calculate when you enter the other).  Note the Fill button allows you to copy the percentage/amount to each month.
      2. Note to see what accounts are tagged as Other Direct Costs, use the Monthly Data screen.
      3. Click Accept & Save when the data entry is complete.
4. Repeat Step 3 to update direct costs forecasts for any other revenue types.
5. Click Done when all the Direct Costs have been updated.

Indirect Costs are forecast in 4 components:

• Wages
• Other Indirect Costs
• Depreciation
• Interest Expense

They can be entered as a percentage of the previous month or a manual amount.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Indirect Costs line.
   1. The last actual monthly amounts by component (Wages, Other, Depreciation, Interest Expense) display.
      1. For each component, enter either a percentage of the previous month or an amount.
      2. Note to see what accounts are tagged as Other Indirect Costs, use the Monthly Data screen.
3. Click Accept & Save when the data entry is complete.

Distributions are forecast either as a percentage of Net Profit, or a manual amount.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Distributions line.
3. Select either Manual or Percentage.
   1. Manual:
      1. Enter manual amounts in each month when you expect Distributions to be paid.
      2. Click Accept & Save when the data entry is complete.
   2. Percentage:
      1. Select when you would like to make distributions: Monthly, Quarterly, Annually
      2. Select a month of the year to distribute.
      3. Set the percentage.  The software will calculate the Distributions.
      4. Click Accept & Save when the data entry is complete.

The Miscellaneous section in the Income Statement includes any Other Income and Other Expenses that are not part of your Revenue, Direct or Indirect Costs. This covers Interest Revenue, Interest Expense, Depreciation, Wages, and Net Other (anything else).

They can be entered as a percentage of the previous month or a manual amount.

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Miscellaneous line.  The last actual monthly amounts by component display.
   1. For each component, enter either a percentage of the previous month or an amount.  Note that Depreciation and Interest Expense amounts are entered as positives.
   2. Note to see what accounts are tagged as Miscellaneous, use the Monthly Data screen.
3. Click Accept & Save when the data entry is complete.

The following Balance Sheet lines are forecast:

• Accounts Receivable
• Inventory
• Accounts Payable
• Fixed Assets

Accounts Receivable

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Accounts Receivable line. The actual AR balance last loaded is displayed, as well as the AR Days.
3. Either enter the number of Days or a manual amount to update the forecast.
4. Click Accept & Save when the data entry is complete.

Inventory

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Inventory line. The actual Inventory balance last loaded is displayed, as well as the Inventory Days.
3. Either enter the number of Days or a manual amount to update the forecast.
4. Click Accept & Save when the data entry is complete.

Accounts Payable

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Accounts Payable line. The actual AP balance last loaded is displayed, as well as the AP Days.
3. Either enter the number of Days or a manual amount to update the forecast.
4. Click Accept & Save when the data entry is complete.

Fixed Assets

1. Go to the Forecast Summary screen.
2. Click the Edit pencil on the Fixed Assets line. The actual FA balance last loaded is displayed.
3. Enter the expected Acquired and Disposed amounts per month.  This shows a running balance of Fixed Assets including depreciation forecast in the Income Statement.
4. Click Accept & Save when the data entry is complete.

When each new month is uploaded into RealTime CEO, the actuals replace the forecast for that month. You can see what was previously forecast for revenue by hovering the cursor over the Forecast Accuracy Factor at the bottom of the Dashboard Summary – this displays the prior 30 days and 90 days forecast figures.