Forecasting Revenue

This chapter provides an overview of revenue forecasting and discusses how to forecast revenue.

Understanding Revenue Forecasting

PeopleSoft Contracts enables you to forecast revenue backlog for both fixed-fee and rate-based contract lines. There are many delivered views that display the forecasted revenue data by organization, contract, accounting, customer, and product groupings. Using standard PeopleSoft Analytic Calculation Engine functionality, you can analyze the information in many different ways with interactive reports. In addition, you can save Analytic Calculation Engine view data into Microsoft Excel spreadsheets.

This section discusses:

• Revenue forecasting functionality.

• Revenue forecasting parameters.

• Revenue forecasting calculations.

• Interactive reports.

• Analytic Calculation Engine configuration.

Revenue Forecasting Functionality

The PeopleSoft Contracts revenue forecasting functionality enables you to:

• Search contracts to define forecast factors by criteria such as contract business unit, contract type, sold to customer, region, product group, product, price type, contract, and line status.

• Forecast on contracts with pending and active processing statuses.

• Choose to view your forecast in contract or general ledger (GL) currency.

• Specify the periods to forecast revenue by setting up the Detail and Summary calendars on the Contracts Installation Options page.

• Define probability percentages for each contract line included in the forecast.

• Define estimated start and end dates for contract lines for which there are no Ready plans linked or events defined.

• Define total estimated amounts for contract lines for which total amounts are not known (such as rate-based contract lines).

• Choose to view your forecast based on product, contract, accounting, customer, or organization information.

• Include or exclude contract lines from the forecast.

• Recalculate the revenue forecast when factors used in the forecast calculation change.

You define the forecasting calendar on the Contracts Installation Options page. With user-configurable budget period calendars, you can use a calendar for the entire application, enabling you to calculate revenue forecasts with a consistent time period.

See Defining Contracts Installation Options.

Revenue Forecasting Parameters

PeopleSoft Contracts provides a work space to define or modify forecast parameters on the Create Forecast page. While many of these parameters appear by default, this page provides access to review and update that information as well as provide more detailed control over for which contract lines the system creates a forecast. Here is a list of editable parameters on the Create Forecast page:

• Estimated start date.

• Estimated completion date.

• Probability.

• Estimated amount.

The system populates by default from the contract line the estimated start and completion dates for rate-based contract lines. For amount-based contract lines, the estimated start and completion dates are hidden when a Ready revenue plan is linked because the plan's events are used in the forecast rather than the estimated start and completion dates. For amount-based contract lines, you must navigate to the Create Forecast page and enter estimated start and completion dates prior to a plan being readied.

For all contract lines, the system enters by default 100 percent in the Probability field. Additionally, for contract lines that are generated by PeopleSoft Proposal Management, the estimated start and completion dates, as well as the estimated amount, populate from the successful proposal.

Revenue Forecasting Calculations

There are four factors involved in the revenue forecast calculation: probability, amount, accounting distribution, and timing. The system applies the probability to the amount defined for the forecast. This amount is the contract line amount less revenue recognized to date. For rate-based contract lines, the contract line amount is the estimated amount defined on the Create Forecast page. The accounting distribution used in the forecast calculations comes from the Accounting Distribution page. Timing can be defined as the buckets to which the forecasted amount and distribution is calculated. The system calculates revenue forecasting buckets differently based on the revenue recognition method for the contract line. If no revenue plan is assigned to a contract line, then the system performs a standard straight line allocation from the user entered estimated start date to the estimated completion date defined for that contract line in detail and summary period buckets based on the defined installation options.

The system defines the timing for revenue forecasts in this way:

• For amount-based contract lines with no revenue plans or with Pending revenue plans, the system spreads the forecast evenly from the estimated start date to the estimated completion date defined for each contract line.

• For milestone and apportionment revenue plans that are Ready or In Progress, the Preview Revenue table is the basis for the forecast.

  For percent complete revenue plans that are Ready or In Progress, the system uses the ready event and then spreads the forecast for the remaining amount not yet defined to events evenly over the estimated start and estimated completion date entered by the user.

• For as incurred revenue plans, the system spreads the estimated amount evenly over the estimated start and estimated completion dates less the amount recognized to date.

  The accounting comes from the Revenue Forecast group box on the Accounting Distribution page (not from the accounting rules).

  Note. The rate-based contract lines are handled differently because the true amounts and accounting distributions are not known until the transactions actually occur and are applied to the accounting rules. However, for forecasting purposes, the basis for the forecast amount and the accounting distribution must come from data that you enter. Enter the accounting distribution for each rate-based contract line. You can split accounting distributions between PeopleSoft General Ledger business units, accounts, and departments.

Note. If you enter an estimated start date that is earlier than the effective date on the accounting distribution, the system creates the forecast using the estimated start date. The system creates a revenue forecast, but generates only one row. The account, department, and general ledger business unit are blank and only the dollar amount appears for this time period. If the estimated start date is the same as or later than the effective date on the accounting distribution, the system creates the forecast with the proper number of rows for the accounting distribution. The system populates the account, department, general ledger business unit, and amounts for all periods.

Note. Contract revenue forecasting uses information only from plans that are in Ready or In Progress status for forecasting contract lines. The system excludes from the forecast contract lines plans that are in Action Required, Completed, Reversal In Progress, or Reversed status. For contract lines without plans or with plans in Pending status, the system uses information from the Create Forecast page in the forecast calculation.

Note. The system generates only one forecast at a time for any contract line. Once you rerun the forecast process, the system overwrites the previous forecast data with the most recent forecast information.

Interactive Reports

PeopleSoft Contracts delivers a model containing 16 views that you can review as interactive reports through Analytic Calculation Engine. These views are broken down into five categories. Within each category there are summary and detail views based on the summary and detail calendars that you set up at the installation level.

Once in the Interactive Report, you can access the following views:

• Product views.

  The product views display product group, product ID, and amount or currency (GL or contract, depending on the view). The views also enable you to filter data by contract type, price type, and contract ID.

  Product views include the following interactive reports:

  • Contract Detail Revenue by Product.

  • Contract Summary Revenue by Product.

  • GL Detail Revenue by Product.

  • GL Summary Revenue by Product.

• Contract views.

  The contract views display CABU, contract type, contract ID, and amount or currency (GL or contract, depending on the view). The views also enable you to filter data by customer and contract status.

  Contract views include the following interactive reports:

  • Contract Detail Revenue by Contract.

  • Contract Summary Revenue by Contract.

  • GL Detail Revenue by Contract.

  • GL Summary Revenue by Contract.

• Accounting views.

  The accounting views display account, department, and GL amount or currency. The views also enable you to filter data by PeopleSoft General Ledger business unit, and contract ID.

  Accounting views include the following interactive reports:

  • GL Detail Revenue by Account.

  • GL Summary Revenue by Account.

• Customer views.

  The customer views display customer, contract status, and contract amount or currency. The views also enable you to filter data by contract type, product group, and contract ID.

  Customer views include the following interactive reports:

  • Contract Detail Revenue by Customer.

  • Contract Summary Revenue by Customer.

• Organization views.

  The organization views display CABU, department, and amount or currency (GL or contract, depending on the view). The views also enable you to filter data by region and contract ID.

  Organization views include the following interactive reports:

  • Contract Detail Revenue by Organization.

  • Contract Summary Revenue by Organization.

  • GL Detail Revenue by Organization.

  • GL Summary Revenue by Organization.

Note. Currency is a required filter for all views.

Note. You cannot edit the data within each report, but you can further filter and rearrange the data that appears on the report. The view is dynamic, thus the system does not save the changes that you make. However, you can download the data.

Analytic Calculation Engine Configuration

Analytic Calculation Engine enables you to view transactional data in multidimensional online reports and categorize information in several ways. You must first configure your Analytic Calculation Engine environment before using the forecast revenue feature. You must select the Enable Report box on the Interactive Report Definitions - Define Reports page to enable the Contracts Forecast Revenue report.

See PeopleTools PeopleBook: Analytic Calculation Engine

Forecasting Revenue

This section discusses how to:

• Set up calendars for revenue forecasts.

• Create revenue forecasts.

• Process revenue forecasts.

• Forecast interactive reports.

• Analyze interactive reports.

Note. You must first configure your Analytic Calculation Engine environment before viewing forecast interactive reports. However, the data can be processed and is stored in a forecast table. Once calculated, the forecast appears as a summed amount on the Review Contract Summary page for each contract forecasted.

Pages Used to Forecast Revenue

Setting Up Calendars for Revenue Forecasts

See Defining Contracts Installation Options.

Creating Revenue Forecasts

Access the Create Forecast page (Customer Contracts, Forecast Revenue, Create Forecast).

Search Criteria

Use the fields in the Search Criteria group box to filter search results by entering specific values in these fields. If you leave all fields blank, the search returns all contract lines for all contracts within your system.

Note. You must enter a value in the Business Unit field.

Note. To view forecast results, you must select a value of None in the Fee Type group box. For contracts with a classification of Government, you can select other values in this field.

See Defining Cost-Plus Contract Fees.

Create Forecast page: Fixed Fee tab

List Management

Note. The system stores only one forecast per contract line. If you want to change any information on a contract line and rerun your forecast, the system overwrites the previous forecast information for the contract line.

Create Forecast page: As Incurred tab

Select the As Incurred tab.

All fields are the same as those on the Fixed Fee tab of the Create Forecast page with the exception of:

Processing Revenue Forecasts

Access the Process Forecast run control page (Customer Contracts, Forecast Revenue, Process Forecast).

Select the parameters for your revenue forecast. You can limit your processing by factors such as contract status, processing status, and contract line status. If you leave all fields blank, the system processes all contracts. This process populates the CA_FC_MAIN table.

Note. You must enter a value in the Business Unit field.

Warning! If you build your forecast by filtering search criteria by PeopleSoft General Ledger business unit, product group, product ID, or contract line status, the forecasted amount may represent only a portion of a contract, because the filters that you select can differ within any contract.

Forecasting Interactive Reports

Access the Forecast Interactive Reports run control page (Customer Contracts, Forecast Revenue, Forecast Interactive Reports).

Note. If you access this page from the Contract Entry component, the system populates the appropriate search criteria fields. Click the Launch Interactive Reports button to build the revenue forecast views in Analytic Calculation Engine for your selection criteria.

Select the parameters for your revenue forecast. You can limit your processing by factors such as contract status, processing status, and contract line status.

Note. You must enter a value in the Business Unit field.

Warning! If you build your forecast by filtering search criteria by PeopleSoft General Ledger business unit, product group, product ID, or contract line status, the forecasted amount may represent only a portion of a contract, because the filters that you select can differ within any contract ID. Additionally, if the system calculates only a portion of the contract due to the selection criteria used to process the revenue forecast, your interactive reports are restricted by the forecast calculated even if you select a broader range of criteria on this page.

Analyzing Interactive Reports

Access the FMS Interactive Reports - Contracts page (Customer Contracts, Forecast Revenue, Forecast Interactive Reports).

After clicking the Launch Interactive Reports button, you can select one of sixteen views from five categories:

• Product

• Contract

• Accounting

• Customer

• Organization

Within each table view, you can drag and drop the data cubes and dimensions to view the data in different ways.

Note. The fields that appear on the page vary based on the type of report that you are viewing.