How do I set up financial forecasting for projects in Profit.co?

Category: PPM

In Profit.co, financial forecasting allows you to project and adjust cost estimates beyond your initial planned values, enabling dynamic budget management as you gain more insight into actual spending patterns and changing project conditions.

What is financial forecasting in Profit.co?

Financial Forecasting is a dynamic budgeting feature that allows you to project updated cost estimates based on current trends, new information, or changing project conditions. While your planned values represent the original budget, forecasting lets you adjust predictions for specific months where you expect costs to differ from the initial plan.

Why should I use financial forecasting for projects?

Financial Forecasting provides critical capabilities for adaptive project management:

Reason Description
Respond to Changes Adjust projections as project conditions change without modifying original baseline
Risk Management Identify potential budget overruns before they occur
Improved Accuracy Update budget estimates based on actual spending patterns and new insights
Informed Decision-Making Make resource allocation decisions based on current projections
Stakeholder Communication Provide realistic cost expectations to stakeholders

How do I access the Cost-Benefit Analysis tab?

Follow these steps to begin setting up financial forecasting:

Step 1

  • Click on Portfolios and Projects from the left navigation panel.
  • Select All Projects or the relevant portfolio.
  • Click on the project where you want to set up financial forecasting.
  • In the project detail page, locate and click the Cost-Benefit Analysis tab.

Note: The Cost-Benefit Analysis tab is not visible by default. It appears only when:

  • Cost-Benefit Analysis (CBA) is enabled in Settings → Portfolios and Projects → Project → Financial tab.
  • The project is configured as a budget-driven project

You will now see the cost planning interface where you can add costs with forecasting.

How do I add costs with financial forecasting?

Step 1

  • If certain months require additional costs beyond your plan value, you can adjust forecasts at the month level:
  • Select the month where you expect cost variance (e.g., month 6)
  • Enter the adjusted amount in the Forecasting section
  • Example: Your baseline is $10,000/month, but month 6 requires an extra $5,000 due to equipment upgrade → enter $5,000 as the forecast for month 6
  • Repeat for any other months requiring adjustments

How do I interpret Plan vs. Forecast vs. Actual?

Understanding the three cost metrics enables effective budget management:

Metric Definition Purpose
Plan Original budgeted cost Baseline for variance analysis
Forecast Current projected cost Best estimate based on current information
Actual Money actually spent Reality check against plan and forecast

Best practices for financial forecasting in Profit.co

  • Update forecasts monthly or whenever significant new information becomes available to maintain accuracy.
  • Don't change planned values after project start; use forecasting to show updated projections while preserving baseline.
  • Document the reason for each forecast adjustment to support variance analysis and lessons learned.
  • Use actual spending trends from completed months to inform forecasts for future months.
  • Apply consistent forecasting methodologies across your portfolio for comparable metrics.

Related Questions

To learn more about Cost-Benefit Analysis in Profit.co Click here

Frequently Asked Questions

Q1. What's the difference between changing the plan and updating the forecast?

The plan is your baseline and should remain stable. Updating the forecast shows your current best estimate without losing the ability to measure variance against the planned budget.

Q2. How often should I update my financial forecasts?

Update forecasts monthly during project reviews or immediately when significant events occur that impact costs (scope changes, vendor quotes, or schedule shifts).

Q3. Can I forecast both recurring and one-time costs?

Yes, the forecasting process works for both one-time costs and recurring costs, allowing you to adjust projections for any cost category.

Related Questions