Scenario planning allows you to visually map out the cash impact of different hypothetical outcomes, so that you can:
Act quickly to mitigate risk
Make informed decisions
See the visual impact of a decision
Test out a hypothesis
Plan ahead
For example, if you were to hire a new employee, expand to a new premises or even take on a new round of investment.
However, before you create a scenario, you'll need to set up your budgets (cash predictions) and projects in your 'Base' forecast to make sure your starting point is accurate. The ‘Base’ will be made up of budgets, invoices, bills and reconciled bank transactions.
When you’re ready to create your first scenario, navigate to the ‘Cash Flow’ tab, click the scenario dropdown, click 'Add scenario layer' and then simply create a name for your new scenario.
Once the new scenario is created, all you need to do is start adding, changing, or removing budgets. Any budgets that are added, changed or removed will ‘stack' on top of the existing budgets to give you an instant view of the impact these changes have made on your base forecast.
Scenario planning can be a powerful way to start answering your business questions.