April 8, 2021
Quick metrics let you see the impact of your forecast, instantly.
Forecasting in Fathom has loads of great features; from quickly modelling an asset purchase, to planning out the next three years in forensic detail. Seeing the impact of future events and being able to adjust when they happen means you can make smarter decisions and choose exactly the right time to deploy them.
Quick Metrics give instant insight into how your forecast and business plans are impacting your key metrics.
The genesis of Quick Metrics came from an initial feature we designed early on: the Cash Position bar. This handy widget would show your current cash position as you move around the Forecasting tool. When we shared this feature with a small group of initial customers, they unanimously loved the concept of knowing their cash position, and immediately wanted to keep a close eye on other metrics as well, so we added several more (see below).
Quick Metrics is all about focus, and embody Fathom's philosophy of helping to make forecasts approachable and actionable. This functionality provides an important education piece where advisors can educate clients on where to focus their attention.
You'll find the Quick Metrics bar towards the bottom of the Forecasting screen. It can display your most critical KPIs in real-time. Any movements, Microforecasts or Scenarios you design will cause them to update accordingly. You can set and adjust the thresholds for each metric based on the client's needs, and know when something’s either off target (it appears red), or on track (it appears green), so you’re always in the know.
Quick Metrics are backed up by the power of the three-way forecast behind them. They seem so simple, but they're coming from a set of three financial statements, so you know you've got the power of the accounting integrity behind it.
Quick Metrics can be used in a variety of ways. They're great for letting you get a good sense for where the figures are at as you’re building your forecast. Another key use is when you’re workshopping options with clients – they can instantly see the impact on their business on the fly.
You can set a primary Quick Metric, and display another four secondary metrics. By default, Cash on Hand is set as the primary metric with a threshold of 10,000 in your chosen currency. Other options besides Change in Cash include; Gross Profit, Operating Profit, EBIT, Retained Income, Gross Profit Margin, Profitability Ratio, Change in Cash, Debt to Equity, Current Ratio, Quick Ratio, Return on Equity, and Operating Profit Margin.
One of the great things about Fathom is its visual nature, from the KPI Explorer to the Goalseek and Growth tools, we know presenting complex financial data visually means people understand it better.
And so we wanted to do the same in Quick Metrics. By default, the Quick Metric bar is minimised, but clicking the arrow symbol pops out any secondary metrics. Selecting the line to the right of each metric toggles from chart mode to graph mode, letting you see the difference between data points in a different way.
As well as appearing under the Main Grid, Quick Metrics appear in several other places, including the Business Roadmap. As you slide events forwards or backwards through time, they update on the fly, so you can find the best time to take action.
Take for example director's drawings. Maybe they want to take cash out of the business, what effect would that have? You can pin Cash on Hand as your primary metric and pull that event through time to reveal that if they wait two months, the business is going to be in a better place against this threshold than if they took that drawing now.
Another example could be a big contract coming in that's going to balloon the gross profit margin. Let’s say that contract gets pushed back. You can quickly and easily show the client the impact without really having to explain all the financial intricacies behind it.
You can also use Quick Metrics with Scenarios. Remember, Scenarios are ways to try out different options on your forecast and see the results. So for example you could create two scenarios; one when the client gets paid in 120 days (as maybe they're slow to collect on accounts receivables). Then a second one when they get paid in 60 days, by simply adjusting the timing profiles. You can then pin Cash on Hand and flip between the two, showing the client how they've been able to pull cash forward in the business. So, if they're collecting in 60 days, their cash on hand balance is going to be higher. Or maybe they want to think about a hiring freeze? You can model those hires as Scenarios and turn them off and on to see the impact of not hiring those people.
Drivers are a great way to incorporate some of your leading indicators or your operational metrics into the financial forecast. This is a really common way for business owners or accountants to model out a forecast. Having drivers in Fathom makes it easy to get closer alignment between your forecast and your actuals, or add data from another system. For example, maybe you've got a CRM, so you know how many clients you're expecting, or how many contracts you're expecting to sign in the next six months or 12 months. You can use that data to build out revenue formulas or expense formulas, which is great for business owners who tend to think more operationally.
As you can see Quick Metrics are pretty powerful. They let you see the impact of business decisions quickly and easily. There’s more information on setting up Quick Metrics and how they relate to your forecast over on our support site, so check that out for more detail.
And remember, Forecasting – including Quick Metrics – is included as standard in your monthly Fathom subscription. And if you're not yet a Fathom user, what are you waiting for? Start your free 14-day trial today.
Andrew is Fathom’s Content Strategist based in the UK. He has a background in journalism and has worked for companies like the BBC and HuffPost, as well as start ups in education and technology. Andrew has also published 5 food books and makes a great pie.
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