Understanding Planning Targets for Bottom-Up Scenarios
This section discusses:
Planning target defaults.
The association of planning target rules in the planning model with a bottom-up budget.
The treatment of starting balances in targets.
Planning Target Defaults
When a scenario group used by the planning model contains a top-down scenario type, it can be used to do one of the following:
Set targets or spending limits for bottom-up budgets, such as limits placed on expenses by an operating unit or department.
Create a budget base for a proposed bottom-up budget.
The budget base serves as a starting point for the proposed bottom-up budget or plan (nonhistory scenario type). In this case, dimension levels of the bottom-up budget must be at the same level or at a higher level in the tree than the top-down plan.
Association of Planning Target Rules in the Planning Model With a Bottom-Up Budget
To use the planning target rules in the planning model with a bottom-up budget, perform the following steps:
Open the planning model in the Planning Model component and verify the scenario group tied to the model contains scenario types for both a top-down plan and bottom-up budget.
For a line item activity and bottom-up scenario in the planning model, link the planning target control definition and top-down target scenario.
This is done by accessing the Data Source page for the bottom-up activity scenario.
In order to view the targets and use them with the bottom-up budget, the top-down scenario must first be exported back to the budget ledger.
Select the View Targets link to define and review the dimensions used as targets to include in validation, view target details, and allow any target overrides by the planning center during budget submission.
Note: To use planning targets with a control budget type, you must define an annual budget period that represents the proposed budget year, then associate that budget period with the scenario when you define the top down target scenario. For example, if the proposed budget period range is 2004M01 to 2004M12, which represents July 1, 2003 through June 30, 2004, you would need to define a single budget period, such as 2004MALL, with a start date of July 1, 2003 and an end date of June 30, 2004. With control budgets, it is not possible to set the target for each year in a multiyear scenario . Therefore, In the case of a proposed control budget that contains multiple years, if you enter a range of yearly budget periods in the top down target scenario, the process will aggregate the periods. This is in contrast to standard or project budget types, which can distinguish between and summarize the different fiscal years when planning targets are set at that level.
Note: A formal business process should be placed around the use and order in which top-down plans and bottom-up budgets are prepared. For example, target data must be available to the bottom-up plan, but if this top-down target data changes during the preparation of the bottom-up plan, the target data can be refreshed by rerunning the export process. But if using active control around budget submissions, keep in mind that budgets may already be in differing states of approval and submission.
Treatment of Starting Balances in Targets
Because targets are always annual totals, they are in essence ending balances for all accounts. Whether the starting balance (period 0) of balance sheet accounts is included in the annual totals depends on whether the target is defined at an account node value that is a balance forward account (as defined by the account type). For example, if the planning target is set against an account node called ASSETS, but the balance forward flag is not enabled for the ASSETS account node, then the starting balance is excluded from the aggregated annual total amount that serves as the ASSETS target.
Note: The line item activity must be flagged as including Balance Sheet Planning to use a starting balance.
Prerequisites
Complete these prerequisites before setting up planning targets:
Set up the scenario group in which to include the planning target rules by defining a unique top-down scenario and by linking it to the bottom-up scenario.
Use Allocation Manager in PeopleSoft EPM Warehouses to allocate to the appropriate level in order to use the data as the budget base when top-down plans exist at a higher level on the dimension tree than bottom-up budgets.
Allocate this data to parameters (such as fiscal year, ledger, and GL scenario) recognized by a scenario within the scenario group that can be selected and used as the data source or seed for a bottom-up budget.
Note: Top-down scenario types or plans cannot use planning targets; only bottom-up scenario type budgets can reference planning targets by indicating which top-down plan is its target.