LESSON 25: Detail is a devil that will make your plans Articles

LESSON 25: Detail is a devil that will make your plans unworkable – this is how to tame it, and yet still get fully functional plans, budgets and forecasts

 In a planning model ‘detail’ means the number of headings making up the model and the resulting number of calculations and relationships. Detail is an issue principally because people tend to try to make their models too detailed, that is, too complex. This is done in the belief that the more detail goes into the […]

25.1 A lot of detail is rarely necessary

 One of the strongest motives for introducing detail is an attempt to get to an increasingly accurate result. There are two factors which determine the accuracy with which your plan is able to predict the future. The first factor is the extent to which your plan incorporates the logical relationships within your business. For example, […]

25.2 You do not need your predictions to be highly accurate

 When you come to use your plan you will find there comes a point where you have to draw a line under the accuracy you can attain. Part of the art of practical modelling is knowing when to stop chasing irrelevant or unattainable increases in accuracy. From that point on it is important to understand […]

25.3 Keep it simple

 For the reasons given above, approximation rather than great detail and ‘accuracy’ is acceptable and even desirable. This is perhaps a rather surprising conclusion, but there we have it. When planning you should seek to identify as few types of sales and costs as you can to produce a realistic model. There can be a […]