How often should businesses forecast their financial future?
Forecasting is a great way of giving yourself different options for a given event. While we may not always be able to shield ourselves from political upheavals or instabilities in the financial market, forecasting change is the only way to keep your business protected.
Regular forecasting gets you closer to your figures
Forecasting often how you make it effective. The market will peak and trough, new competitors will appear, customers will drift away and staff will turn over – these situations are, unfortunately, unavoidable. If you want to be confident and on top of where you’re heading, we’d advise you do it at least weekly. Using real-time software will make this task a whole lot quicker and more efficient.
Forecasting will expand your thinking and give you a better understanding of your company. Keeping close tabs on your financial positioning can translate your goals into specific targets, and make you take a step back and see the bigger picture. Your historical data is useful, but the more regularly you update your assumptions the more relevant your forecasted data is.
Save time later and do it now
Business owners working long hours might simply not have the time to do any financial planning. You’ve now got two options: put it off for even longer, or make decisions that are potentially based on errors. Not only will both end in more work overall, your plan is only as truthful as the numbers in it so get it done as soon as possible.
Your budget will help you determine your forecast. Your budget is more of a static point A to point B guide, while your forecast lets you navigate your path in real-time. Your business is changing direction constantly so re-forecasting often is essential. This can be daily, weekly or monthly – whatever your business demands.
Let Futrli do the heavy lifting
Pulling data from the cloud every day, Futrli automatically pulls in your figures from Xero, QuickBooks Online or MYOB. It can then create rolling forecasts. You’ll be able to keep track of the financial state of your business in real-time. Updating often is necessary to make better decisions based on facts.
If you’re struggling with how to begin, have a look at the Futrli how-to guides. Things to bear in mind with forecasting include the changes you’d like to see in your business, changes to the market, and your objectives and goals – not only for the year but longer term.