Save days of work with auto-updating actuals
Save days of work updating actuals into spreadsheets. With FUTRLI, actuals update automatically at period end, or when you set them to start.
How accurate is your budget today?
Reality can diverge from your budget extremely quickly, especially if your sales pipeline is only large enough to support operations for the next few months. If so, sales could change so fast that the budget will look like science fiction by the second quarter of the year, and not even bear a slight resemblance to actual results by the end of the year.
There is a solution
The solution is to adopt a rolling forecast, which gives you a predicted yr end position and updated forecast data that is more aligned to the actual operations of your business. If you have a complex budgeting model, the work needed to maintain a rolling forecast may seem like an impossibility. But the way we have designed FUTRLI, means that this is now not even a task that you need to perform.
The old, old way:
A budget is cast, and every month after month-end, the actuals are compared to it. But if the actuals are drifting away from the initial assumptions, the budget starts to lose its value.
The old way mark 2:
Adopting a rolling forecast meant that while the business was more in tune, you would have to is to revise your budget as soon as the financial statements are released for the preceding month (again, time lag comes into play). At a minimum, you would drop the actual year-to-date numbers into the budget, add the revised sales forecast, and see what happened to profits.
The new way!
You need to do nothing apart from update any assumptions that are now not in line with true operations. All of the actual data flows effortlessly through to your scenarios and any report card that you’ve set up with the “Forecast + Actuals” setting, because we sync your data daily, automatically. (You can of course refresh your data at the click of a button, any time you like!)
One of our favourite cards is illustrated below, and gives a seamless view over what the predicted yr end position for your business is.
Because we keep it simple, you can focus on the key drivers of success, rather than being bogged down too far in the details.
How many budget scenarios should I prepare?
Most companies prepare just a single budget scenario, which is their best guess regarding how the next year will turn out. This scenario is based upon a range of supporting assumptions, any one of which can lead to diverging results – and usually does. So, though you may spend a considerable amount of time on that “mainstream” budget scenario, just that one version will not be enough to prepare you for what may – and probably will – happen.
It makes sense to add two more scenarios, one for the absolute worst case, where bankruptcy is looming, and one for the most phenomenal sales success. Sounds unlikely that either one will ever happen? If you don’t plan for success, it never will happen, and bankruptcy scenarios are far more frequent than you might think. Consequently, it is useful to know what resources you’ll need for a phenomenally successful year, and how deep you will have to cut to avoid bankruptcy. Is that enough scenarios? No.
There are gaping holes between the two opposite-extreme scenarios and the mainstream version. Realistically, actual results will fall into either of those two holes, so you should spend some time figuring out what you will do for situations that are somewhat above and below the mainstream scenario.
So the answer is – five budget scenarios. However, if some of your underlying assumptions are more likely than not to occur or to fail, then you may want to drum up some extra models just for those specific situations.
It is so easy with FUTRLI. After you create your first scenario, you can create quick or advanced copies of it and get flexing!
But remember! because the copying is quick – flexing out the multiple scenarios means that you only need to tweak a few accounts to get your creative juices flowing with how you would expand on success and how you can protect your business from any worst case that may be around the corner, if the sales you forecast don’t come in or credit terms extend too far into the distance.
And then visualise them side by side!
“For me, it's simple. I want to give my clients the kind of service that they rave about. I've been in this game for over 30 years and I've worked with countless business owners (and I'm an accountant!) but that's the point - I've never witnessed anything like this. My clients are hooked. I genuinely love tech and finding newer and better ways to work and FUTRLI delivers massively for my own practice here too. I would never go back to historical reporting apps or spreadsheets. FUTRLI is the future.” - Amanda Fisher