ManagePLUS for QuickBooks

ManagePLUS creates reports in its own internal spreadsheet, which provides several advantages. An important one is that it lets you use the report as a starting point for answering management questions…

“What if fuel costs rise by 50%? How will that affect net income?”

“What if labor costs rise by 15%? How much will that add to my per-unit cost of producing running shoes?”

“What if corn yields fall by 10% this year? How would that affect my per-bushel cost of production?

When you first prepare a report it is a summary of your actual accounting data. ManagePLUS lets you turn it into into a business projection by changing parts of the report (cells of the report spreadsheet) and seeing how those changes affect per-unit costs and revenues, profit, and other aspects of your business. Because making such changes lets you see what would happen “if” things changed in a certain way, it is often called “what-if” analysis or playing “what-if”.

This topic gives you details about using ManagePLUS reports for what-if analysis.

Getting ready

To work along with the examples in this topic you should:

Highlighting editable cells

ManagePLUS lets you change some cells in a report but not all of them. If important cells weren’t protected from editing, you might accidentally erase or overwrite necessary formulas on which the report depends.

To make it easy to see which cells are editable, you can have ManagePLUS highlight them in a different color. This is the default behavior of ManagePLUS, but sometimes you may want to turn off the highlighting while printing reports, and turn it on again for making further report changes. Here are two view of the same cell area, with and without highlighting.

If you want to change the highlighting color, you can do that in the Preferences window.

Editing cells

To use a report for what-if analysis, edit the contents of one or more cells in the report spreadsheet.

“What-if”:  an example

The easiest way to learn about doing what-if analysis is to try it. This example demonstrates the idea.

Here’s a fragment of the Expense section from a Profit & Loss with Classes report:

The selected cell (the one with the dark border) shows an expense of $6720 in the Fertilizer:Nitrogen account for the Corn:2007:Jones class.

But what if nitrogen fertilizer costs were to rise by 25%?

More “what-if”:  changing supporting information

Some reports include supporting information which you can edit, to see how it affects the report. For example, the Profit & Loss with Classes report shows income and expense by account but also has class breakdowns within each account. The supporting information for these classes can be edited to see their effect in the per-unit expenses, etc., in the report.

Reports which are based on supporting information put a copy of it on supplemental sheet of the report, separate from the main report sheet. If you change information on the supplemental sheet, the main report will be updated to reflect your changes—the same as when you changing editable cells in the main report.

Let’s see how to change supporting information in the Profit & Loss with Classes report.

When I change information for a child class, why isn’t the parent class information updated automatically? This is by design. Many situations call for analyzing parent classes on a basis that’s unrelated to the one used for child classes. So if you want a child class’ information to contribute to a “total” for its parents, you must update parent class information manually, as we have done in this example.

Practical considerations

We used fertilizer expense for this example because it has continuity with the other screen shots in this topic and therefore lets you compare the screen shots to see how the main report sheet was affected by making changes in the supporting information. But fertilizer is a direct variable cost of producing corn, so in reality you probably wouldn’t project an increase in corn acreage without also projecting an increase in spending for fertilizer too.

A more real-world example of why you’d play “what-if” with supporting information, would be to see how different management quantity levels would affect per-unit costs for fixed- or overhead-expense items like machinery depreciation. Assuming more acres of corn could be produced with the same set of machinery, changing the Corn class acreages would show how fixed machinery cost (depreciation expense) per acre would change with more acres of production.

Where to change supporting information

You really have two choices of where to make changes in supporting information:

When ManagePLUS builds a report, it copies the information from the supporting list’s window to the report’s supplemental sheet. So when you change information on the supplemental sheet of a report you are changing the report’s copy of the information, not the “master copy” in the list’s window.

In the example above, the Corn class acreage changes would affect only the report where those changes were made. If we were to open another (new) copy of the report, it would be built with information direct from the Classes window; and so, it would not include the acreage changes made in the first report.

Where you change supporting information then, should depend on how persistent you want those changes to be: