This feature is included with Fathom Pro - the plan with access to all of Fathom's features. Companies on Portfolio can be upgraded to Fathom Pro at any time.

What is a scenario?

A scenario is a version of your forecast that differs from your main forecast.

Scenarios are useful for planning around challenges and experimenting with opportunities without changing your main forecast.

You can adjust your baseline rules and change the timing & layering of microforecasts in a scenario without influencing your main forecast. You’re also able to easily compare scenarios in a report.

Scenarios help you answer questions like:

What do we do if expenses increase?

How should we spend our additional income? Should we expand the sales team? Or invest in additional resources?

What actions should we take if our Costs of Sales increase?

Anytime you want to answer a what-if question and not change assumptions in your main forecast, you should use a scenario.

💡Smart Tip: What's the difference between microforecasts and scenarios? Learn from our 'Forecast What-ifs' article.

How do scenarios interact with the main forecast?

Scenarios do not impact the main forecast; however, they are based on and updated in accordance with the main forecast.

When you create a scenario, you have the option to base it on your main forecast or another scenario. Your first scenario must be based on your main forecast; ultimately, every scenario will lead back to your main forecast.

Example: You create Scenario A based on your main forecast. You change a few assumptions in Scenario A. You create Scenario B based on Scenario A.

Any main forecast assumptions not overridden by Scenario A are carried into Scenario B.

Basing a scenario on the main forecast or another scenario has two main advantages:

Scenarios remain relevant
Scenarios can be created quickly

Scenarios remain relevant

Forecasts and scenarios are only valuable for decision-making when they’re up to date.

Scenarios stay up to date, along with the main forecast. As you update your main forecast and change the assumptions you made, your scenarios will update accordingly.

You do not need to copy changes you made in your main forecast to your scenarios. Only rules not overridden by the scenario will update from the main forecast.

Example 1: A business forecasts future revenue by using the rolling average of the previous 12 months. The business updates its actuals with the latest month's results. These new results cause the rolling average in the forecast to recalculate.

The scenario also recalculates the rolling average using the new actual values.

Example 2: A company has discovered that it will need to make repairs to a large piece of machinery next month. They use direct entry to add the expected repair cost to their 'Repairs' expense account for the next month. The scenarios are also updated to reflect this direct entry.

If rules are overridden in a scenario to not match the baseline, those rules will not update in conjunction with the baseline.

Example: A business created a scenario to compare with their main forecast. In the main forecast, they use the 'Link to Previous Period' value rule to forecast their 'Travel Expense' account.

In the scenario, the business has forecast the 'Travel Expenses' account with the 'Smart Prediction' rolling-average value rule.

In the main forecast, the business updates the value rule for the 'Travel Expense' account to include a 2% increase on top of last year's actuals. The scenario remains unaffected.

Scenarios can be created quickly

You can set up a new scenario quickly because you do not start from scratch.

All the baseline rules from the main forecast or the other scenario are carried into the new scenario. You can then make changes or override those baseline rules in the scenario.

How to create a scenario

You can have an unlimited number of scenarios. To create a scenario of your forecast:

Click the Thought Bubble icon on the left sidebar of your forecast.
Click + Create scenario at the bottom of the menu.
Name your scenario. A descriptive name will help you keep track of which is which (e.g. Decreased Revenue, Increased Marketing Spend, etc.).
Create your scenario using your Main Forecast or another scenario.
1. This will be the forecast or scenario baseline and microforecast configuration from which your new scenario is copied or based.
+ Add configuration (optional)
1. Adjust your baseline by an amount or %. This takes the baseline values from the option chosen in Step 3 and increases or decreases them.
2. You can only adjust your main P&L classifications when creating a scenario. You can make adjustments to specific accounts after your scenario is created.
Choose microforecasts that will be active or inactive in the scenario. (optional)
1. You can turn microforecasts on or off and change their timing after the scenario has been created.
Click Create scenario.

After your scenario has been created, you will be taken back to your forecast. You will see a light green box with the scenario name in the upper-right corner of your forecast.

Any changes you make will only impact the scenario you are viewing.

What can you change in a scenario?

You can do the following in a scenario without impacting your main forecast:

Change the rules used to forecast your baseline projections

Adjust the baseline by a % or amounts

Change the timing & layering of microforecasts

Change baseline rules

You can change the following baseline rules within a scenario:

Rule type	What it forecasts	Possible questions answered
Value rules	Revenue Cost of Sales Expenses	What if our ‘Marketing Expenses’ account increases by 5%? And we expect Sales to increase by 2%? What if we base Revenue projections on the last 2 years instead of just the last year?
Driver values/calculations	Interest payments When calculated with a formula value rule that references driver(s): Revenue Cost of Sales Expenses	What if we qualify for a loan with a 7% interest rate instead of 5%? What if our ‘Complete projects’ driver increases? How does that impact Revenue?
Timing Profiles	Cash Accounts Receivable Accounts Payable Unearned or Deferred Revenue Prepayment or Prepaid Expenses	What if we change our payment terms from 90 days to 60 days?

It is not possible to change journals and schedules in scenarios.

To change a rule or profile in a scenario:

Click on the cell for the account, heading, classification, or driver you want to change.
1. If you have microforecasts active on the account, you'll have to click on the 'Baseline' for the account.
In the left-side menu, click the Three dots icon next to the value rule or timing profile.
Choose New rule.
Create a new rule.

You can also double-click and type into a cell to override any values with a direct entry.

Adjust the baseline

Scenarios also have a baseline adjustment value rule that you can use to calculate Revenue, Cost of Sales, and Expense accounts.

This value rule takes the baseline figures and adjusts them by a % or currency amount. The baseline figures come from the main forecast or scenario you chose to base your current scenario on.

Example: A company wants to explore actions it will take if its 'Sales' account increases by 3% compared to the baseline.

The company creates a scenario based on its main forecast. In the scenario, they use a 'Baseline Adjustment' value rule on the 'Sales' account to add a 3% increase to the baseline figures of the main forecast.

To apply the baseline adjustment value rule in a scenario:

Click the cell period for the account, heading, or classification you want to adjust.
1. If there are microforecasts active on the account, you'll need to select a cell for the 'Baseline' values.
In the left-side menu, click the Three dots icon next to the value rule.
Select New rule.
From the drop-down, choose Baseline Adjustment.
Select % or currency increase/decrease.
Type in the percentage or amount.
Click Create rule.

Change the timing & layering of microforecasts

Outside of changes to the baseline, each scenario has its own version of the business roadmap. So, you can change the timing and layering of microforecasts in a scenario without impacting your main forecast or another scenario.

Example: A business is considering hiring additional staff and releasing a new product line. The business is unsure of the best timing for the new hires and product line launch.

Microforecasts have been created for each new hire and the new product line. The business creates multiple scenarios with different compositions and timing of microforecasts.

Turn scenarios on and off

You can instantly turn a scenario on or off.

To turn a scenario off:

Find the light green box with the name of the scenario in the upper-right corner of your forecast.
Click the X.

To turn a scenario on:

Click the Thought Bubble icon on the left sidebar.
Select the scenario you want to view or work on.

💡Smart Tip: Keep an eye on the quick metrics bar as you turn a scenario on or off. The results on the bar will update instantly. You can also compare scenarios in a Pro report.

Edit or delete a scenario

When a scenario is turned on, you are working within that scenario. Any changes or adjustments you make will be saved to the scenario.

You can also delete a scenario you’re no longer considering.

To delete a scenario:

Click the Thought Bubble icon on the left sidebar.
Click the Three dots icon next to the scenario name.
Select Delete.

Deleting a scenario is a non-recoverable action. You would need to re-create the scenario to bring it back.

Next steps

To continue our ‘Forecast What-ifs' workflow, you can learn about the following:

To explore...	Learn about...
Layering and timing your microforecasts in your main forecast or scenario	Business Roadmap
Build out individual business events or projects in your forecast	Microforecasts

Ready to report on your forecast? Learn how.

Learn more

Create scenarios