Business Forecasting Like a Boss
mAccounting provides business accounting expertise and best in class cloud-based platforms that empower start-up and SMB CEOs to manage payroll, accounts payable/ receivable, taxes, investor reports and more from their smartphone – like a boss.
We believe that when business owners know the basics of accounting, BUDGETING, and financial management, they make better business decisions.
This article is not leading to a webinar or an online certificate in accounting. Instead, we provide the ‘basics in brief’ for bosses who want to know more about the forecasting arts.
We encourage you to reach out to mAccounting for a deeper dive into your company’s forecasting model. Call us and we’ll nerd out over forecasting models.
Forecasting is Accounting’s Crystal Ball
Business is hardly known for its fortune-telling. And yet, FORECASTING makes accountants seem magical because it prepares CEOs to guide their company through changes in the market such as tariffs or a surge in sales that call for an increase in variable costs (e.g. material and supplies or customer service).
Accounting forecasts are not intuition-based, like fortune-telling, but data-driven. Qualitative and quantitative FORECASTING MODELS shape the historic data of a company’s expenses and revenues to shape realistic predictions of future events — kind of like a crystal ball, but flatter and spreadsheet shaped.
Budgeting For The Unknown With Confidence Needs Forecasting
Forecasting and BUDGETING are complimentary planning tools that affect business operations.
A budget is created to reflect the current financial position, set performance goals for a certain period, and is compared to actual results. Forecasting uses historical data of costs and revenues, but these are not compared to actual results.
Budgets are reviewed periodically as a measure of performance for the year. Financial forecasts are updated regularly and whenever there is a change to the business plan.
A forecast can be short- or long-term. A budget is typically a full year of expenses and revenue projections.
Forecasts and budgets are the dynamic duos that enable management to make adjustments throughout the year based on business goals and performance projections.
Further Down the Accounting Road
At mAccounting, we know that vision is an essential ingredient in any business plan. The way is not always clear in business, but solid financials and accounting systems help to confidently see further down the road.
Now you know what a forecast does and how it complements a budget and vice versa.
Building the right forecast for your business takes an accounting system and an experienced accountant who can help with the culling of the right data and conducting the analysis. That is how you forecast like a boss.
Are you looking to improve your company’s forecasting today? CONTACT US.