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Why do I need to forecast the future?

Monday, November 26, 2018
By Cheryl Sharp
Why do I need to forecast the future?

When we set up an online accounting system for a small business those owners get a fresh set of accurate numbers daily/weekly/monthly – not just once per year.

We are more in touch with the business, which allows us to constantly review the numbers and suggest ways of improving business performance.  It also allows us to use forecasting apps to show the business where they are headed.

How does forecasting help?

Firstly we’re able to help plan for your future – you’re able to grow your business as we’re able to see what’s coming.  Preparing a cashflow forecast can help foresee any issues you have with cashflow and will highlight any times when you possibly won’t have enough cash to pay the bills.  This allows you to prepare and make arrangements to deal with these problems in plenty of time (i.e. ask for longer to pay a bill/set up a payment plan, possibly apply for a loan, make more of an effort to get your sales paid etc).

We can run 'what if scenarios' so we can see how certain things will affect your cashflow.  For example, say you have a big job opportunity, but there are lots of upfront costs.  Can you take the job?  We can run a 'what if scenario' to see what is going to happen to your cashflow if you don’t get paid until X date.

Thinking of taking on extra staff, or moving to a larger office?  What happens if your biggest invoice doesn’t get paid? What if your sales decrease next month?  We can see how this will affect your business.  We can also foresee what will happen in 3 months, 6 months or a year down the line if your sales do not increase in line with the additional staff and space.

And so on!  We can really help you to plan for your future and help you make decisions, knowing that you’re not just ‘winging it’ and you can actually afford these things.

If you want more certainty in your business let’s talk together about your future – visit our forecasting page to start your future today!