Financial forecasting is a widely acknowledged best practise for businesses who want to build a successful future but it is so easy to let it slip off the priority radar.
Here are 8 reasons why you need to make sure it doesn’t...
1. Failure is expensive
Forecasting is considerably cheaper than failing, which is a real possibility if you aren’t forecasting the various financial factors which are integral to running your business.
Our financial forecasting software is FREE to trial and could save you considerable time and money further down the line.
2. Plan for growth
The plan for any business is to grow and this could come in a number of different ways; organically, merger, acquisition and so on.
The only way you can effectively and reliably plan the growth of your business is to forecast. You can forecast different growth scenarios to see which ones are viable and which aren’t. Reliable financial forecasting will show you where the possibilities for growth could come from and what the likely timescale could be for that growth.
Our intuitive forecasting software shows you the vital information you need to make such decisions in a simple, easy-to-interpret dashboard making planning and evaluating future growth strategies a piece of cake!
3. Make better decisions
Information is power and the information you can quickly glean from accurate financial forecasting can allow you to make better-informed decisions meaning a stronger business. This will help you to demonstrate your decisive leadership skills to your workforce and instil a sense of confidence in you and the business – essential for successful.
4. Improve your cash flow management
Cash flow is the lifeblood of any business and can quickly throttle it if not managed closely. Most accounting systems can give you a retrospective overview of your cash flow but rarely do they allow you to forecast into the future and see what may lay ahead for your cash flow.
Forecasting can also show you the impact different scenarios and decisions could have on your cash flow specifically. We have written extensively in our blog, on how financial forecasting can improve cash flow and ultimately lead to a stronger company.
5. Avoid potential financial disaster
Financial forecasting gives you a clear view into the future that will show you if there are any bumps in the road ahead which could derail your business. This allows you to put remedial actions in place to successfully navigate any potential dangers.
Typically, SMEs don’t see cash flow problems coming and fail to anticipate large bills etc. and this can have larger than expected consequences if not anticipated.
Using our simple financial forecasting software would solve this problem immediately, leading to peace of mind.
6. Improve your profit margins
In the same way as managing your cash flow, your accounting software will be able to show you your retrospective profits but it will not be able to show you what the future could hold for your profit margins.
The success of your profit margins and cash flow are reliant on many different factors and each of these have an impact on your future cash flow and profits. Imagine if you could see the impact of changing just one or two of these factors? The decisions you could make with that information is almost endless!
7. Model ideas
If you stand still in business, you may as well be going backwards. Innovation and creative thinking is what drives companies forward, but how do you know if your ideas are good ones? How do you know if they are going to be financially viable? Answer: Financial forecasting.
With our financial forecasting software you can model your new business ideas before you take action, invest money in them or risk other assets you have worked hard to establish.
8. Keep investors informed
With our financial forecasting software you can securely publish an unlimited amount of forecasts to keep investors informed of the progress your business is making and demonstrate the fiscal strength within your business. In short, that their investment in you and your business was a good one.
Equally, if you are looking for finance to fund future growth or a new business idea, being able to demonstrate the future performance of their investment will go a long way to proving yourself as a sound investment.
You can try our financial forecasting software for FREE right now to see where you could be saving money, making more profits and growing in the future.
Try it now!