As a business owner, it’s been increasingly difficult to ride out the changing economic conditions and manage the financial ups and downs of doing business in 2024.
According to data from the Ministry of Business, Innovation and Employment, company liquidations are up 40% in the first eight months of 2024 when compared to 2023.
Knowing what’s around the next corner would be incredibly helpful. This is where forecasting tools and financial projections can become a real game-changer.
Why your business should embrace financial forecasting.
Good financial management starts with solid bookkeeping and accounting processes. But your accounts only tell you what’s happened in the PAST – not what will happen in the FUTURE.
Financial forecasting takes this historic accounting data and projects areas like cashflow, operating expenses and revenue forward in time. In essence, what you get is a projection of how your finances may look one month, six months or even a year down the line.
Why is this important?
Let’s look at just a few of the benefits of using accurate forecasting to manage the financial strategy and health of the business:
Accurate predictions.
Our forecasting service can analyse your historical data and current trends to provide accurate predictions of future sales, expenses and cash flow. These forecasts allow you to accurately see how your finances will look in the future.
Proactive financial management.
Armed with these forecasts, you can quickly see where there’s a need to boost revenue, manage cashflow or optimise your allocation of resources. In short, this information helps you assess and avoid the big financial pitfalls. You’ll be able to make informed decisions such as, should I invest now or later? Should you make changes to your credit or loan payments?
Improved cashflow management.
Forecasting helps you spot any potential cashflow shortages or surpluses. This prior warning gives you time to make decisions to rebalance cash shortfalls, or find useful ways to reinvest the surplus cash, or decide to pay down debt further.
Better allocation of resources.
With a deeper understanding of your future financial needs, you can allocate resources like equipment and staff more effectively. This helps to boost growth and expansion, while keeping your finances in a healthy position.
Data-driven decision-making.
With our forecasting service, you have the data, forecasts and reporting needed to make truly informed decisions about your business’s financial future and to review these decisions regularly.
Talk to us about forecasting.
We use a range of financial forecasting apps, all of which can neatly integrate with your existing accounting software and business reporting systems that will allow you to make better business decisions.
Our team can run you through what a forecasting report looks like, show you various scenarios for scenario planning, and talk you through these reports to give you a bigger picture of your business.
