As indicated in step 1 in Chapter 3, the Global Administrator defines the setup on Enterprise level.  This is a one-time action that only requires attention afterwards in case of changes. The following aspects needs to be covered during setup:

  • Definition of the Enterprise Structure (including connection to Reaforce project companies)
  • Definition of the Cash Flow Structure
  • Index Series for the Enterprise
  • Payment Schedules for the Enterprise
  • VAT Categories for the Enterprise
  • Corporate Tax tariffs for the Enterprise
  • Revenue & Costs recognition for the Enterprise

 

To do this, go to Settings in the navigation panel and then choose the Enterprise-level settings.

(see picture below): 

Example - Screen: Settings Enterprise


These steps are detailed in the following sections.

 


5.1 Definition Enterprise Structure

The Global Administrator can define Entities and their hierarchy within the Enterprise. Next, for every Entity a connection with the source system can be added (project companies from Reaforce), as well as ownership percentages (see picture below).

 

At first, child Entities are added. Click on the parent entity to add the child entity to and click on Add Subsidiary. Next, enter the name of the Subsidiary. When using Reaforce as a source system, click on the cell in the second column and select the appropriate Reaforce company.

WARNING: 

After adding a new Entity, don't forget to assign User Roles for the new Entity.

Example - Screen: Settings Enterprise – Enterprise Structure


It is possible to move an Subsidiary up and down within its parent using the Up and Down buttons. In doing so, the position of the Entity is changed in relevant screens.

WARNING: 

It is not possible to move a Subsidiary to another parent Entity, for now.

 

When creating a new Subsidiary, also the ownership structure for this Entity can be defined. First click on the Subsidiary on the left side of the screen. At the right side of the screen the ownership structure for the Subsidiary is shown (see picture below). Initially the ownership is set to 100% owned by the parent entity and 0% external ownership. 

 

Next, it is possible to add one or more parent entities from within the Enterprise. All external parents are grouped in one entry called External. Lastly, the relative ownership for each of the parent entities can be entered as relative numbers. Using these relative numbers, the system calculates the ownership percentages so that the total always match 100%.

 

With a relative number 5 for parent A, 3 for parent B, and 2 for External, parent A possesses 50%, parent B 30% and External 20%. 

Example - Screen: Settings Enterprise – Enterprise Structure – Ownership Structure


After confirming all changes, by Clicking Save, changes to the Enterprise Structure are stored. Dependent on the size of the Enterprise and the number of Financial Plans, this action can take quite a while. When the changes have been processed, the header will show a notification:

 

It is possible to change the name of an Entity at a later stage by cklicking on the name of the appropriate entity. In that case, the name of the Entity is modified in both open and closed plans.

 

WARNING: 

Preferably to make changes in the Enterprise Structure when Financial Plans are closed. This limits the burden that this change places on the system. If participation percentages are adjusted, this will be calculated for all Entities within an open Plan; this is done independently of the workflow status of the Entities within the Plan. If a closed Plan is reopened, changes made prior to the reopening will not be calculated. Changes in the Enterprise Structure after reopening could lead to an error message within the system due to a conflict between the current Entity Structure and the Entity Structure of the reopened Financial Plan.

 


5.2 Definition Cash Flow Structure

The Global Administrator can detail the Cash Flow Structure by adding groups (see section 5.2.1), dependent on reporting and analysis needs. Adding groups is only possible for General Expenses.

 

In addition to changing the general Cash Flow Structure, the structure for Excel import projects can be defined (see section 5.2.2).

 

5.2.1 Cash Flow Structure: general structure

For all Entities within the Enterprise the same Cash Flow Structure is used. It is not required for every Entity to use each Cash Flow line though. Within the general Cash Flow Structure, the Global Administrator is able to make changes to General Expenses.

 

Choose in the screen Cash Flow Structure the option FP&A (see picture below). The current Cash Flow Structure is shown on the right. By clicking Add Category, a new category is added in General Expenses. This Category can be given the correct naming. In addition the Category can be positioned within the Cash Flow Structure using the Move Up and Move Down buttons. 

Example - Screen: Settings Enterprise – Cash Flow Structure


A Category may be deleted by selecting the Category and clicking on the recycle bin icon on the right.

This is only possible in case the Category is not used in open Financial Plans.

 

5.2.2 Cash Flow Structure: Excel projects

Next to importing Reaforce projects it is possible to import Excel projects (section 9.2.2.). This requires defining first the structure for Excel projects. 

 

Choose in the screen Cash Flow Structure the option Excel (see picture below). The current Cash Flow Structure is shown. By clicking on the Plus-sign on a Cash Flow line, a new Category is added to the structure. An unlimited number of categories or layers can be added in this way. Each Category can be given the correct naming. In addition the Category can be positioned within the Cash Flow Structure using the Move Up and Move Down buttons. 

Example - Screen: Settings Enterprise – Cash Flow Structure Excel


A Category may be deleted by selecting the Category and clicking on the recycle bin icon. on the right.

 


5.3 Index series (Enterprise)

The Global Administrator is able to define one or more Index Series that can be made available for every active entity in the Enterprise (see picture below). The amounts in Cash Flow prognosis are calculated based on a/o index percentages.

 

To create an Index Series, click the button Add Index Series. A row is added to the grid after which the series can be given a name. Next, index percentages can be added per year. 

Add a new start year or end year where needed using the respective buttons. A start- or end year can be removed by clicking on the three dots next to the start- or end year header and choose Delete Year. An Index Series may be deleted by selecting the Index Series and clicking on the recycle bin icon on the right.

 

The index value of the last year is used for all future, undefined years.

Example - Screen: Settings Enterprise – Index Series



5.4 Payment Schedules (Enterprise)

The Global Administrator is able to define one or more Payment Schedules that can be made available for every active entity in the Enterprise (see picture below).

 

To create a new Payment Schedule, click the button Add Schedule. A slide-in appears in which the Payment Schedule can be given a name and optional description. Next, relative numbers can be added per month. Yearly payments will distributed over individual months according these relative numbers.

Example - Screen: Settings Enterprise – Payment Schedules


A Payment Schedule may be deleted by selecting the Payment Schedule and ticking the checkbox on the left and then click on the Delete button.

 


5.5. VAT Categories (Enterprise)

The Global Administrator defines VAT Categories and related percentages. Future year percentages can be added based on own insights (see picture below).

 

To create a VAT Category, click the button Add Category. A row is added to the grid after which the schedule can be given a name and description. Next, VAT percentages can be added per year. Add a new start year or end year where needed using the respective buttons. 

A year can be removed by clicking on the three dots next to the year header and choose Delete Year.

 

The VAT percentage of the last year is used for all future, undefined years.

Example - Screen: Settings Enterprise – VAT Categories


The amounts in Cash Flow prognosis are calculated based on a/o the VAT percentages. 

 

A VAT Category may be deleted by selecting the VAT Category and clicking on the recycle bin icon on the right. 

 


5.6 Corporate Income Tax (Enterprise)

The Global Administrator defines Taxable income brackets and related tax rates. Future year percentages can be added based on own insights (see picture below).

Example - Screen: Settings Enterprise – Corporate Tax


To create a tax bracket, click the button Add Corporate Tax. A row is added to the grid after which taxable income bracket and tax rate can be entered. Next, Tax rates can be added per year. Add a new start year or end year where needed using the respective buttons. A start- or end year can be removed by clicking on the three dots next to the start- or end year header and choose Delete Year. An Income Tax line may be deleted by selecting the Income Tax line and clicking on the recycle bin icon on the right.

 

The tax rates of the last year are used for all future, undefined years.

 


5.7 Revenue & Cost Recognition (Enterprise)

Using the template in Revenue & Cost Recognition, the translation from Cash Flow to Profit & Loss and Balance Sheet is defined (see picture below).

Example - Screen: Settings Enterprise – Revenue & Cost Recognition


Revenue and cost recognition settings can be entered at three levels: at Enterprise level, at Entity level and at Project level. Enterprise-level settings are overridden by Entity-level settings. Entity-level settings are in turn overridden by settings on the Project. After downloading and defining the data in the template, the file can be loaded into the application using the Upload button.

Example - Excel for grouping Revenue & Cost Recognition


Within the Configuration worksheet (see picture above), groups can be defined in column A. A Percentage of Completion method can be assigned to each group (colum B), whereby Revenues and Costs are recognized in the Profit & Loss account. It is also possible to indicate per group whether and from what moment on costs should be activated (columns C and D). 

 

There are four methods of Revenue & Cost Recognition possible:


1. Based on sales planning

In this method, the sales planning is leading for the recognition in the Profit & Loss account. The costs and revenues in the cash flow (from Reaforce and Excel projects) will appear as turnover in the Profit & Loss account in proportion to the sales planning.


2. Based on completed contracts

Completion of the construction phase is leading here. At the time of construction completion, the costs and revenues in the cashflow (from Reaforce and Excel projects) will appear as turnover in the Profit & Loss account for all sold units. 

For all units still unsold, the costs and revenues in the cashflow will appear as turnover in the Profit & Loss account when these units are sold. 


3. Based on sales – Cash flow planning

For this method, the revenues in the cash flow (from Reaforce and Excel projects) are leading. The turnover in the Profit & Loss account follows the revenues from the cash flow.

4. Based on costs

For this method, the costs in the cash flow (from Reaforce and Excel projects) are leading. The turnover in the Profit & Loss account follows the costs from the cash flow.

 

The Activated column determines whether expenses are recognized as costs in the Profit & Loss account. If Activated is set to Yes, costs will be activated from the defined start date. The costs are therefore recognized in the balance sheet as work in progress.

Work in progress will be released in proportion to the increase in turnover.

Example - Excel for connecting Cash Flow lines to groups


Within the Method Selection worksheet, the financial structure is shown in columns A, B and C (see picture above). This data originates from the Reaforce as source system. At the time of download, the list will be updated from the source. This refreshes the columns A to C. 

WARNING: 

It is therefore always advisable to update the list when creating the financial plan. If the code is missing in the Excel, it will be added. If the code in Excel no longer exists in Reaforce, this code will simply remain in the list.

 

Using column D, the link is made between the cash flow line and the group. This groups the individual cash flow lines of the source for Revenue & Cost Recognition. In case a cash flow line is not linked to a group, it will be shown in the Profit & Loss account in accordance to the cash flow.

 

After the template has been set up, it can be uploaded to make the settings active. Depending on the level at which the template is uploaded (Enterprise / Entity / Project), it will be applied within the open and new plans.