The baseline is the foundation of the forecast.

The baseline of the forecast represents ‘business as usual’ or what would happen if the business were to run as it currently does. The rest of your forecast decisions and scenarios are built on the baseline.

By forecasting the baseline, you can answer the question:

Before you can consider all the possible ‘what-ifs’, you need to understand the current direction of the business.

The baseline establishes what will happen if current trends continue, so you can consider and plan for challenges and opportunities that may arise.

You may have questions like ‘What do we do if expenses increase 5-10%?’. To answer that question, you need to forecast expenses as usual, or as if they were going to continue according to current trends, before you consider an increase.

Or you might be wondering, ‘Can we hire an additional employee?’. You need to forecast the salaries of your existing employees before you explore additional hires.

Alternatively, you may want to purchase additional equipment and need to determine whether to buy it outright or finance it with a loan. Forecasting your expected cash flow is key before considering large asset purchases.

To help you establish a baseline, you can directly compare your forecast to historical figures and trends on the forecasting grid. The side-by-side view allows you to identify any accounts that do not align with historical figures.

View up to 12 months of actuals by scrolling to the left. Actuals or historical periods are highlighted in light grey and are imported from your source accounting system.

Once you've created a forecast, you can begin to build out your baseline. To forecast the baseline:

Once you have forecast your baseline, you can consider and plan for what-ifs.

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