Build or attach a financial case

The financial case is the forward-looking decision model behind the business case. It holds the NPV (net present value), IRR (internal rate of return) and payback that inform the invest / continue call. This guide shows you how to build one in Tollgate or attach your own.

Before you start

• You need edit rights, and the business case should be in Discovery (Exploring) or Draft.
• The financial case is a decision model.

Tollgate deliberately does not link the financial case to your work-package budgets or change requests, in either direction. See The money model for why the two money layers stay apart.

Open the financial case

1. Open Business Case on the project’s Tollgate tab.
2. Choose Financial case in the section rail to open its full-page editor.
3. Pick a mode:
   • Use Tollgate’s model — build a cashflow model and let Tollgate compute the metrics.
   • Attach your own — record headline figures and link to an external model.
   • None yet — leave the financial case unset for now.

Option A — Build a model in Tollgate

1. Select Use Tollgate’s model.
2. Enter the cashflows year by year. Year 0 is the upfront outlay and stays undiscounted.
3. Set the discount rate (r). The default is 8% — typically your cost of capital or hurdle rate.
4. Tollgate computes and displays:
   • NPV — net present value by discounted cash flow.
   • IRR — the rate at which NPV is zero. Shows N/A when the cashflows never cross from negative to positive.
   • Payback — undiscounted payback, with the crossing year interpolated.
5. Each metric carries an info button explaining the formula as Tollgate computes it.

The formulas Tollgate uses

The built-in model works from the net cashflow per year — net[t] = revenue[t] − cost[t] — across your horizon (3, 5 or 7 years), at discount rate r (default 8%). Year 0 is the upfront outlay and stays undiscounted.

NPV — net present value

NPV = Σ  net[t] / (1 + r)^t        for t = 0 … N

Year 0 (t = 0) stays undiscounted. Tollgate discounts each later year by (1 + r)^t.

IRR — internal rate of return is the rate r* that makes NPV zero:

NPV(r*) = Σ  net[t] / (1 + r*)^t = 0

No closed form exists, so Tollgate solves it numerically. It runs Newton–Raphson from r = 10%, with a bracketed-bisection fallback that scans r ∈ [−99%, 1000%]. Tollgate first checks whether the cashflows change sign. With no sign change there is no IRR, and Tollgate shows N/A. With two or more sign changes the root may be non-unique, so Tollgate flags it rather than presenting one figure as definitive.

Payback — undiscounted is the first year the cumulative net cashflow turns non-negative, interpolated within that crossing year:

payback = (t − 1) + ( −cumulative[t−1] / net[t] )

where t is the first year with cumulative[t] ≥ 0. If the cashflows never recover the outlay over the horizon, payback is N/A. A discounted-payback variant runs the same test on the discounted cashflows net[t] / (1 + r)^t.

Option B — Attach your own model

1. Select Attach your own.
2. Under Linked model, pick the supporting document that holds the workings. Add it under Supporting documents first if needed.
3. Enter the stated NPV, IRR and payback from your model. All three are optional.

Tollgate and Ask Tollgate can then point back to the linked source. See Attach supporting documents.

Publish figures to the board paper

Once you link a board paper as a supporting document, use Update key figures in Confluence. Tollgate writes the key financial figures into the paper’s fenced key-figures section. This keeps the sponsor’s decision artefact current.

Until you link a board paper, the action does not appear. A No board paper linked yet message offers a Create or link a board paper shortcut instead. The push action appears once a board paper exists.

Next steps

• Submit the business case for approval.