The Importance of Business Forecasting

Cashmanager | 5 years ago

You cannot predict the future of your business, but you can reduce risk by eliminating the guesswork. With accurate forecasting, you can make a systematic attempt to understand future performance. This will allow you to make better informed decisions and become more resistant to unforeseen financial requirements.

Without correctly estimating financial requirements and understanding changing markets, your business decisions will be guess work which can result in insufferable damage.

Business forecasting is typically categorised into:

Market forecasts

Businesses must adjust to changing markets, and adjustments can only be made by predicting what will happen in the marketplace. When you examine the market at large you are able to understand consumer trends which will allow you to make more accurate sales predictions.

Sales forecasting

Sales forecasting will allow you to accurately predict the demand of your product in the near future. This will allow you to make better informed managerial decisions such as increasing stock and staff.

Financial forecasting

When you accurately forecast your business financials, you have transparency over its performance. This will tell you if your business is reaching its KPIs. Without the correct estimate of financial requirements, businesses cannot make informed decisions which can result in insufferable damage.

Cash flow

Cash flow forecasting is essential for any business to survive. All businesses have to deal with uncontrollable variables that can throw off sales forecasts, but well-organised cash flow forecast will prepare you for any unforeseen expenses.

Budgets

Once you have a clear idea of your cash flow and future performance, you can make budgets to create opportunities for your business. With the right accounting software, creating and managing budgets is made easy. 

To adjust to changing markets and prepare your business for external influences, forecasting must be carried out regularly and with precision. Fortunately, CashManager has made it easier for businesses to have complete control.

With great features such Reporting and Budgets, CashManager accounting software allows business owners to understand their performance at a glance. In addition, CashManager brings together all your financial information; from invoices and bank statements to electronic fund transfer payments, to give you the confidence in making financial decisions that are backed with accurate data.

CashManager’s streamlined budgeting tool allows you to create unlimited budgets so you can monitor how your plan is going on a monthly and yearly basis. This is backed by our reporting feature that allows you to track your budgeting with your actual cash flow, helping you review and adjust your budgets throughout the year and prepare for the unexpected. Just another way CashManager accounting software gives you full transparency and makes accounting easy.