Scenario Modeling

Overview

Scenario modeling lets you create alternate versions of your cash flow forecast to answer “what if” questions. You can add simulation rules that modify, add, or override cash flows without changing your baseline forecast. Compare multiple scenarios side by side to evaluate different strategies before making decisions.

Creating a Scenario

1. Navigate to Cash flow then Scenarios in the sidebar
2. Click Create Scenario
3. Name the scenario to reflect what you are modeling (e.g., “Conservative Draw Schedule” or “Accelerated Hiring”)
4. Set the start date, granularity (weekly or monthly), and duration
5. Click Create

To create a branched scenario that inherits from an existing one, open the parent scenario and click the Branch button. The child scenario inherits all cash flows from its parent, so you only need to add the differences you want to model.

Simulation Rules

Simulation rules are the core of scenario modeling. Each rule modifies the forecast in a specific way without touching your actual data. You can add multiple rules to a single scenario, and they apply in combination.

New Transaction

New transactions create synthetic cash flow entries that do not exist in your baseline forecast. Use these to model hypothetical transactions.

When to use: Modeling a potential new revenue stream, a one-time capital expenditure, or any cash flow that does not yet exist in your forecast.

How to set up:

1. Open a scenario and click Add Simulation Rule
2. Select New Transaction
3. Enter the amount, direction (inflow or outflow), and expected date
4. Assign a cash category
5. Set recurrence if the transaction repeats

Ghost Source

Ghost sources create virtual financial objects like phantom loans or hypothetical credit facilities. Unlike new transactions which add individual cash flows, ghost sources create entire instruments that generate their own cash flow patterns.

When to use: Modeling the impact of taking on a new loan, opening a new credit facility, or adding a new investment instrument.

Advanced Adjustment

Advanced adjustments modify existing cash flows by applying percentage or absolute changes. You can target specific cash flows based on their attributes.

When to use: Modeling a 10% increase in operating expenses, a revenue adjustment for seasonal variation, or across-the-board changes to a category.

How to set up:

1. Add a simulation rule and select Advanced Adjustment
2. Define which cash flows to target using filters (by category, counterparty, bank account, amount, or direction)
3. Set the adjustment as a percentage or fixed amount
4. The rule applies to all matching cash flows in the scenario

Source Overrides

Source overrides change the parameters of existing financial sources (loans, credit facilities, investments) without modifying the original records.

When to use: Modeling what happens if you refinance a loan at a lower rate, change the maturity date of an investment, or pay off a facility early.

How to set up:

1. Add a simulation rule and select Source Override
2. Choose the source to override
3. Modify parameters like interest rate, credit limit, or maturity date
4. The scenario recalculates cash flows using the overridden parameters

LOC (Line of Credit) Rules

Four rule types let you model credit facility activity:

LOC Draw - Schedule a draw from an existing or virtual line of credit. Specify the draw amount and date.

LOC Repayment - Schedule a repayment to a line of credit. Specify the repayment amount and date.

Add LOC - Create a hypothetical new line of credit that does not exist yet. Define the credit limit, interest rate, and terms. You can then add draw and repayment rules against this virtual LOC.

Override LOC - Override the credit limit or interest rate on an existing line of credit.

When to use: Modeling different draw schedules, evaluating whether to add a new credit facility, comparing repayment strategies, or stress-testing credit utilization.

HubSpot Pipeline

This rule imports deals from your HubSpot CRM pipeline as simulated cash inflows. Deal amounts and expected close dates become expected cash flows in the scenario.

When to use: Modeling revenue if your sales pipeline closes as projected, comparing conservative versus optimistic pipeline outcomes.

How to set up:

1. Ensure HubSpot is connected under Integrations in the sidebar
2. Add a simulation rule and select HubSpot Pipeline
3. Configure which pipeline stages to include
4. The rule creates expected inflows based on deal values and close dates

Comparing Scenarios

To compare scenarios:

1. Navigate to Cash flow then Scenarios
2. Select two or more scenarios
3. The comparison view shows projected cash positions overlaid on the same chart
4. Differences between scenarios are highlighted, making it easy to see the impact of each set of rules

Freezing a Scenario

Freezing locks a scenario’s simulation rules from editing while the chart continues to update with live bank data. This is useful for:

• Preserving a forecast configuration for later accuracy measurement
• Creating a record of what was projected versus what actually happened
• Locking a board-approved budget scenario

To freeze a scenario, open it and click Freeze. Frozen scenarios remain visible for comparison and their rules cannot be edited. If you need to make changes later, click Unfreeze to unlock the rules again.

Tips for Effective Scenario Modeling

• Start with your baseline - Keep your primary scenario clean with only confirmed cash flows. Use child scenarios for what-if analysis.
• Name scenarios descriptively - “Q2 Conservative” is better than “Scenario 3.”
• Combine rule types - A single scenario can include new transactions, adjustments, and LOC rules together to model complex situations.
• Revisit frozen scenarios - After a quarter ends, compare your frozen forecast against actuals using reconciliation to measure forecast accuracy.
• Use filters on adjustments - Target adjustments narrowly. An across-the-board 10% cut is less useful than adjusting specific categories where you have real uncertainty.