Resolving Out of Balance forecasts

Introduction

Castaway is a 3-way forecasting and reporting system, meaning that the Profit & Loss, Balance Sheet and Cashflow reports are all integrated. By design, these reports should always be in balance. However, if your reports are out of balance (OOB), here’s how to track down the problem.

Review the Balance Sheet

We’ll start by reviewing the projected Balance Sheet:

1. switch to the balance sheet report. If Actuals are enabled, select ‘Projected’ from the Report On selector
2. make sure all periods are visible. If necessary, go to the Report view settings and select Show Opening
3. from the date setting options, make sure the Month view is selected

 Next, we’ll look at how the OOB value(s) behave over time. We can tell a lot from knowing when the OOB starts, whether the values are constant or changing over time, whether they start in an Opening, Actuals or Projected month

OOB starts in the Opening Month

If the OOB starts in the Opening Balance Sheet AND is always the same number, the problem is likely to arise from incorrect data entry:

1. open the Opening Balance Sheet data entry screen
2. check that your balance sheet data entry is correct, including the Retained Earnings

OOB starts in an Actuals month

If the OOB starts in an Actuals Month, the problem is likely to arise from incorrect data entry, incomplete mapping from your general ledger or a prior period adjustment that hasn’t been transferred across to Castaway. Follow these steps in order until you identify the problem:

1. first, open the Actuals Balance Sheet Entry screen and focus on the OOB month(s)
2. in each OOB month, check that your balance sheet data entry is correct
3. if you have imported data from Excel, or via the Castaway Integrations add-on, check whether any of your general ledger accounts have not been mapped
4. next, check that the Retained Earnings figure calculated by Castaway each month agrees to your general ledger numbers
5. if not, check in your general ledger for any direct journal entries into a Retained Earnings account. These will need to be manually updated into a separate Equity element in Castaway, because Castaway automatically calculates Retained Earnings in actuals months to ensure accounting integrity
6. open the Actuals Profit & Loss Entry screen and check that your data entry is correct
7. check the Net Profit after Tax figures each month against your general ledger reports in case there has been a prior period adjustment that has not been reflected in Castaway

 OOB starts in a Projected month

If the OOB starts in a projected month, there are 2 main possibilities:

1. an accounting illogicality in an Inventory element with Purchases Method set to Enter Closing Inventory
2. a missing Repayment Bank Account in a Loan element

To check for problems with Inventory elements:

1. go to Forecast > Element Settings, then click on the Element groups icon to bring up the Edit Element Properties screen
2. click the Inventory icon and the Purchases button, then look for any Inventory elements with the Purchases Method set to Enter Closing Inventory Balance
3. if you find any, return to the Castaway main screen and go into the data entry screens for each of the Inventory elements noted above
4. if any element has a Total Purchases value of 0 in the OOB month, look more closely at the calculation logic. Castaway is designed to not accept a negative value for the calculated Total Purchases value. Therefore, ensure that the Opening Inventory balance – Total Inventory Outflow – Closing Inventory balance would not result in a negative number. If it would, adjust the Cost of Goods Sold value or the Closing Inventory balance to correct the problem

To check for problems with Loan elements:

1. go to Forecast > Element Settings, then click on the Element Groups icon to bring up the Edit Element Properties screen
2. click the Asset-Loan and/or Liability-Loan elements and the Settings button
3. if any Loan element has the Repayment Bank Account left blank, select an appropriate Bank Account element from the dropdown list
4. go to Reporting and check that your reports are now in balance

This article covers the main reasons why Castaway forecasts can get out of balance. If none of these ideas helps you resolve your OOB, contact our support team on [e-mail] for more expert assistance.