Forecasting & financial planning
Forecasting, or budgeting, is a key business tool that allows you to make important business decisions based on information not guesswork.
This is the process of looking into the future to see what your financials will look like in the year ahead. As well as being a necessity if you’re seeking external finance, having a forecast profit and loss account, balance sheet and cashflow for next year will enable you to answer questions such as ‘can we take on extra staff?’ ‘Can we purchase a new machine?’
Also, by performing sensitivity analysis, we can tweak your forecasts to show you the outcome of small changes. What will happen to your cashflow if you get your debtors to pay you five days earlier? How much does your profit improve by if you put your prices up by 5%?
This is valuable information. And once the forecasts are prepared, we can slot the numbers into your management accounts, and start comparing your actual performance with the forecast and exploring the reasons for any variances.