(Jan 21, 2021) Clockwork’s new-and-improved Assumptions Builder is live, which means it’s now easier than ever to add custom rules and dial-in your Financial Model in record time!
When you connect your accounting system to Clockwork, it automatically learns from trends and patterns in your transaction-level data to build a financial projection and cash flow forecast that are customized to your business. It’s extremely accurate, but Clockwork doesn’t know everything...
If you’re about to ditch your lease and go fully-remote, or market conditions are fundamentally changing overnight (e.g. the onset of a global pandemic), there’s a good chance Clockwork won’t predict that solely based on your historical data. That’s why it’s important to add some of your own Assumptions to the model, so you can enhance the baseline forecast with unique knowledge about what's coming up - i.e. teach Clockwork about your business.
One basic example of an Assumption might be that you’re going to steadily grow your marketing spend over the next 18 months. Another example could be that you’re adding a new product line and you expect to sell 50,000 units at a 25% margin over the next 2 quarters. Adding those extra details will make your forecasts infinitely more accurate.
Building assumptions in a spreadsheet has always been a nightmare, so in Clockwork we wanted to make it as fast and painless as possible. To add a new Assumption to your Financial Model, you can either click “+ Add Assumptions” and choose an account, or click directly into the forecast cell where you’d like to begin building, and an Assumption card will appear.
Click the “+ Add Assumptions” button
Click directly into a forecast cell
Once the Assumption card is open, all you need to do is select a date range, and build your rule. Easy enough! There are 4 general approaches to building your rule, depending on the type of behavior you're trying to capture:
% Growth: the forecast value will grow or decrease at your user-defined monthly, quarterly, or annual rate (e.g. expecting revenue to grow 50% this year)
Price x Quantity: the forecast value will be calculated based on specific price and quantity inputs (e.g. hire 5 new employees at $50k per year, or sell 750 units of a product at $9.99)
% of Account: the forecast will be tied to the value in another account at a defined percentage (e.g. Cost of Goods Sold is always 28% of Product Revenue, or Sales Commissions are 3% of Subscription Revenue)
Mix-and-Match: combine multiple rules into a single Assumption to model more complex behavior (e.g. within the Payroll account you could build a combination of employee salaries, % based commissions, and growth rates, all in one place)
With just a couple of clicks you can have your forecast completely dialed in, so you get more accurate insights, make better decisions, and stop getting headaches every time you think about your financial model.
Follow the links below to learn more about Clockwork, or click to create an account and start your free 14-day trial (no credit card required)
Just connect your accounting system, wait a couple of minutes while Clockwork imports and analyzes your data, and you’re ready to go!