Projects and investments – a natural part of FP&A

In many organisations, FP&A naturally focuses on the upper half of the income statement. Revenue, COGS, OPEX and staffing are modelled using the organisation’s key metrics and drivers, and budgets and forecasts are often prepared together with the business teams, who provide input for the model. This is a good process, and with the right tools it need not be particularly demanding to manage. But how do projects and investments affect the bigger picture?

Projects and investments are often handled separately or in a simplified way. This might mean a separate CAPEX budget, manual budget entries or Excel spreadsheets alongside the rest of the planning process.

This does not have to be a problem. But as projects grow and investments affect the income statement, balance sheet and cash flow, it becomes increasingly important that the project plan is connected to the financial plan.

A major investment affects cash flow when it is paid for, the balance sheet when it is capitalised, and profit when depreciation of the asset begins.

Projects and investments – integrated in Cumulus BI

To make projects and investments easy to manage, we at Binovi have built a module directly into Cumulus BI, integrated with the income statement, balance sheet and cash flow. The module is designed to work out of the box, without time-consuming configuration. Like the other modules in Cumulus BI, the projects and investments module can be adapted to each customer’s specific needs.

The project module handles projects that drive CAPEX, OPEX or REVENUE – or a combination of these. For investment projects, it supports the full lifecycle of implementation → capitalisation → depreciation.

This means that investments planned in the project module also flow through to the wider financial plan – the income statement, balance sheet and cash flow.

The projects and investments module includes a customisable list of project types that determines how planned project expenditure is posted to accounts. This means users do not have to consider the technical accounting details of how project expenditure should be mapped to the income statement and balance sheet. Projects can also be divided into main projects and subprojects to manage more complex project structures.