In our recent Friday Fabric Lunch n’ Learn session, we delved into creating the ultimate Profit & Loss (P&L) forecast using Microsoft Fabric. Here’s how you can leverage these tools to build a flexible, robust, and visually appealing P&L report that satisfies the needs of your finance team, data team, and governance team.
Understanding the Need for a Comprehensive P&L Forecast
Creating a P&L forecast isn’t just about generating numbers; it’s about ensuring that every department within the organization—from finance to governance—can easily access and interpret the data they need. Our goal is to build a P&L report that not only displays financial performance but also offers flexibility in how the data is viewed and analyzed.
Key Steps in Building the P&L Pipeline
1. Consolidating ERP Data
Multiple ERP Ingestion Pipelines: We started by creating pipelines to ingest data from various ERP systems. This data is then standardized and brought into a centralized silver layer in Microsoft Fabric.
Addressing Data Discrepancies: One of the challenges we faced was dealing with different column formats across regions (e.g., Australia having a different column than other regions). We resolved this by standardizing the columns before consolidating the data.
2. Creating a Silver Lakehouse
Silver Layer Creation: After consolidating the ERP data, we moved the data into a silver lakehouse. This step is crucial for organizing data into a format that’s ready for advanced analysis and visualization.
Modularity and Access Control: We discussed the importance of modularity in our data architecture. While there was a debate about whether to keep everything in one lakehouse or separate them by layers (bronze, silver, gold), we opted for a single lakehouse with strong access control measures.
3. Designing the P&L Report
Collecting P&L Examples: To design the best P&L report, we reviewed various examples of income statements and P&L reports. We aimed to combine the best features from each, such as including previous year comparisons, budget versus actuals, and different types of reports (e.g., EBITDA, cash flow).
Flexible Reporting: One of the key features we implemented was the ability to change the type of report (e.g., switch between P&L, balance sheet, and cash flow) within the same dashboard. This flexibility allows users to tailor the report to their specific needs.
Practical Tips for Success
Data Flow vs. Notebook for Data Transformation: While data flows in Microsoft Fabric are easy to use, they can be resource-intensive. We recommend starting with data flows to define the logic and then converting to a notebook for efficiency.
Handling Data Transformations: When dealing with large datasets, it’s important to optimize the data transformation steps. For example, by consolidating data in the silver layer, we minimize redundancy and improve performance.
By following these steps, you can create a P&L forecast that not only meets but exceeds the needs of your organization. Microsoft Fabric provides the tools and flexibility to build a report that is both comprehensive and easy to use. As you continue to refine your P&L report, consider the needs of all stakeholders and strive for a balance between functionality and ease of use.
