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      Incorporate Inflation for the Forecast

      Learn how to include Inflation growth in your Jirav models

      By recognizing how inflation affects purchasing power, costs, investments, and overall economic health, individuals and organizations can create more reliable forecasts that lead to informed decision-making and sustainable growth. As the economic landscape continues to evolve, understanding and accounting for inflation will remain a critical component of sound financial management.

      This article outlines three exemplary approaches for integrating Inflation growth into Facility expense forecasting:

      1. Option 1: Periodic Growth Driver with 3% Inflation Growth every 1 Year
      2. Option 2: Annual Target for the first Year of the Forecast and Periodic Growth Driver as 3% Inflation Growth every 1 Year
      3. Option 3: Custom Driver with 3% YoY Inflation Growth

      Before adding Drivers explained under all 3 options, ensure that Auto Forecast is turned off for this Account (it may be on for others by default) from Settings⚙️> Forecast > Auto-Forecast > Individual Account Settings:

      Additional Resources:



      Option 1: Periodic Growth Driver with 3% Inflation Growth every 1 Year

      1. Disable Auto-Forecast for Facilities account
      2. Click the three-dot menu in the Facilities account
      3. Add Periodic Growth Driver:
        1. Driver Name: Yearly Inflation %
        2. Growth Assumption: Periodic % Increase
        3. Increase by: create a Inflation % Assumption (keep Percent (%) Type) as 3%
        4. every 1 Year
        5. Increase Start Date: Relative Month - Next Fiscal Year: Month 1
        6. Base to Grow: Last 6 Months (Average)
      4. Update the Inflation % Assumption when required  

      Option 2: Annual Target for the first Year of the Forecast and Periodic Growth Driver as 3% Inflation Growth every 1 Year

      1. Disable Auto-Forecast for Facilities account
      2. Click the three-dot menu in the Facilities account
      3. Add Annual Target Driver:
        1. Driver Name: Annual Facilities FY25
        2. Fiscal Year: 2025
        3. Annual Target: create a Annual Facilities FY25 Assumption (keep Money ($) Type)
        4. Monthly Allocation: Evenly Split Across Months
      4. Add Periodic Growth Driver:
        1. Driver Name: Yearly Inflation %
        2. Growth Assumption: Periodic % Increase
        3. Increase by: create a Inflation % Assumption (keep Percent (%) Type) as 3%
        4. every 1 Year
        5. Increase Start Date: Relative Month - Next Fiscal Year: Month 1
        6. Base to Grow: Custom: January 2025 - December 2025 Average
        7. click on More Options and update the Start Date Type to Specific Date as January 2026
      5. Update the Inflation % Assumption when required  

       

      Option 3: Custom Driver with 3% YoY Inflation Growth

      1. Disable Auto-Forecast for Facilities account
      2. Navigate to Settings⚙️> Assumptions and add Inflation Rate # Assumption (keep Number (#) Type)
      3. Click the three-dot menu in the Facilities account
      4. Add Custom Driver:
        1. Driver Name: Inflation based on 12 mo ago
        2. Input 1: Category - Output | Range - This Month Last Year
        3. fx: x
        4. Input 2: Category - Assumptions - Inflation Rate #
      5. Click on the Assumptions icon (3rd icon under right Navigation panel) and populate Inflation Rate # Assumption as 1.03 (as it's Number format) to apply 3% increase YoY

      Additional Resources: