Contents
💡 Pro Tip: You can download and view a sample Fathom start-up report at the bottom of this article.
Start-up metrics or KPIs
While Fathom has several default financial KPIs (Key Performance Indicators) to choose from, you can also create custom KPIs to track for your start-up company or client.
You can create custom KPIs in 'Step 4 - KPIs' of a company's Settings. How you set up your custom KPIs depends on how your Chart of Accounts is set up in Fathom.
There are four main types of custom KPIs:
Custom KPI Type | How a start-up might use it... |
Import and track data outside of your Charts of Accounts, such as:
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Track the performance of important accounts or headings at a glance, such as:
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Create custom formulas using your financial and non-financial results, such as:
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If you have divisions (e.g. classes, locations, tracking categories), then you can track the performance of a metric for specific divisions, such as:
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Fathom has some KPIs included in the KPI Library by default. You can add these KPIs to your start-up company and enter the data for them into Fathom or import the data through Google Sheets or Excel.
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💡 Pro Tip: Not sure which metrics or KPIs to track for your start-up? Learn how to choose the right KPIs for your start-up.
Learn more about setting up KPIs for your start-up company or client by seeing our 'Step 4 - KPIs' article.
Forecasting for start-ups
Some particular forecasting concerns of start-ups include:
💡 Pro Tip: You may want to watch our 'Forecasting for Funding' webinar. It discusses forecasting to obtain funding and uses a start-up company as one of the example companies.
For more general information on forecasting in Fathom, please see the following articles:
Identifying low cash periods
When forecasting in Fathom, use the Quick Metrics bar to identify when cash will run out or fall below a threshold.
The Quick Metrics bar is at the bottom of the forecasting grid or business roadmap and is automatically updated as you make changes to the forecast.
A period will be highlighted in red when the Cash on Hand amount is forecast to fall below the set threshold.
Rather than setting a threshold of 0, we recommend setting a threshold of when action should be taken. The Quick Metrics bar will then highlight periods of low cash for the business, providing a warning before Cash is negative.
To edit the Cash on Hand threshold:
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💡 Pro Tip: You can also use the 'Edit Metrics' option to add other metrics, like Debt to Equity, to the bar.
Forecasting without historical data
📝 Note: If the company you're forecasting for does not yet have a source accounting system, you can import a Chart of Accounts into Fathom from Excel to begin forecasting. You would use the Fathom Excel import template and leave out the financial results.
In Fathom, the Profit & Loss is forecast according to value rules. If your company or client does not have any historical data or does not have reliable historical data, you can still use the following value rules to forecast the Profit & Loss:
💡 Pro Tip: For a more detailed explanation of the above options, see this part of our Forecasting for Funding webinar. |
Learn more about value rules and using formulas and drivers to forecast from the Setting Up Value Rules and Using Formulas or Drivers articles.
💡 Pro Tip: To help you keep track of forecasting decisions and include your reasoning in a report, add an assumptions note to your rules.
Are there advantages to using drivers?
While setting up drivers and formula value rules can take longer than other value rules, drivers offer additional flexibility when using scenarios in Fathom.
Example: A company forecast their Revenue account with the following formula:
The 'Expected number of customers' and 'Average sale per customer' are drivers in Fathom.
The values of these drivers may be based on industry standards, expected market share, and other factors. The company is fairly confident in the predicted driver values but also wants to plan for other potential outcomes. |
Scenarios can be used to forecast and strategise for the other potential Revenue outcomes. Scenario A could be a lower Revenue scenario, and Scenario B could be a higher revenue scenario. The main forecast would use the original driver values and formula.
To quickly create Scenario A and Scenario B, you can use the Baseline Adjustment rule to increase or decrease revenue by a certain percentage.
Scenario A would be a 10% decrease in Revenue
Scenario B would be a 10% increase in the original Revenue forecast
With drivers, you can explore more scenarios. In Fathom, you can change driver values in a scenario without impacting the driver values in the main forecast.
In this case, you can change the expected number of customers or the average sale per customer instead of changing the overall revenue amount.
Scenario A could be a scenario in which the 'Expected number of customers' was 10% less than the original forecast, but the 'Average sale per customer' remained the same.
Scenario B could involve a 10% increase in the 'Expected number of customers' while keeping the 'Average sale per customer' the same as the original forecast.
Scenarios C & D could see the 'Expected number of customers' remaining the same as the original forecast while the 'Average sale per customer' decreased or increased respectively.
Forecasting headcount
Fathom enables you to easily forecast new hires with microforecasts. As part of a microforecast, you can include:
Additional revenue expected to be brought in by the employee
Equipment purchases for a new hire
The salary or contract expense and associated taxes
Microforecasts are easy to turn on and off if you're unsure of or want to quickly experiment with hiring additional employees.
On the Business Roadmap, you can easily change and experiment with the timing of microforecasts to determine when additional employees should be hired.
To learn more about microforecasts and the business roadmap, see our 'Using Microforecasts' and 'Using the Business Roadmap' articles.
💡 Pro Tip: Confused about the differences between microforecasts and scenarios? Check out our 'Microforecasts vs Scenarios' article.
Forecasting five years out
By default, Fathom's forecasting tool will forecast three years beyond the end of the current financial year. However, some banks and funding institutions require a five-year forecast.
You can extend the forecast to five years beyond the current financial year. Learn more about extending the forecast from our 'Can I forecast more than 3 years?' article.
Reporting for start-ups
Start-ups have specific reporting needs, usually focused on generating funding or providing evidence for their predicted performance.
When reporting on the forecast, start-ups often need to:
💡 Pro Tip: You can download and view a sample Fathom start-up report at the bottom of this article.
For more general information on reporting in Fathom, please see the following articles:
Detailed cash forecast
Fathom's traditional indirect cash flow statement may not satisfy stakeholders. Many people prefer the Balance Sheet Layer Detail table to show how cash is forecast to be spent.
This table starts with the Opening balance, shows all the cash inflows and outflows from the Profit & Loss, schedules & journals, and taxes, and ends with the Closing balance for each period.
To add this table to a report:
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Comparing scenarios
One metric's performance can be compared across multiple scenarios with a scenario comparison chart.
You can also report on the predicted financials for scenarios by filtering a Financial Trends table to display the results of a scenario.
To add a scenario's forecast financials to a report:
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Learn more about adding these types of charts and tables to a report by viewing our 'Forecast in Reports' article.
Explain how the forecast was calculated
Documenting the reasoning behind your forecast decisions can help convince stakeholders of your forecast's validity. You can include your reasoning in a report with:
Assumptions table
You can add notes as you change value rules and timing profiles or add drivers to your forecast.
If you've checked the option to 'Include in assumptions report', the note will appear in the Assumptions table in a report.
To learn more about creating assumptions notes and customising an assumptions table, see our 'Documenting forecast assumptions' article.
Drivers table
If you've incorporated drivers into your forecast, you can include the driver values in a report.
To add a Drivers table to a report:
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Additional knowledge & common questions