Are you satisfied with the profit your business is making?
If you are satisfied, then you should think of making it consistently. But how are you going to do it?
Usually, business owners start with Accounting.
- Estimation? Check ✓
- Expense? Check ✓
- Evaluation? Check ✓
Did we miss something here! Well… Most businesses forget about Budgeting (Some do it) and Forecasting.
These two game-changers drive your business in the right direction towards uphill.
Budgeting is a detailed outline of how your plan for this fiscal year to be carried out from time to time. It covers items like revenue, cash flow, expense, and debt reduction.
Budgeting is as crucial as planning. Every business requires budgeting to manage their expenses and revenue plan. When the actuals exceed the budget then the financial model can be adjusted accordingly, which allows us to make necessary changes to the company whenever something goes wrong or out of hand.
Next comes Forecasting; it analyses the past performance of your business and plans for the financial future of your company.
Forecasting predicts how your company is going to perform in the future considering sales & targets. This prediction is done with a clear understanding of a company’s historical data and current market scenario. The management team can anticipate the result based on past financial data of the company.
The features of forecasting are:
– Forecasts should be updated regularly; when a change in inventory, operation, or in your business plan.
– Immediate action can be taken on the forecasted data.
As per an internal survey that we conducted among the audiences, it is clear that budgeting helps businesses keep revenue and expense on track while Financial Forecasting works similar to weather forecast; the management team can avoid potential malfunctions in operations/inventory for the smooth running of your business.
Now that Budgeting & Forecasting became easier with Cloud-based software. They generate accurate predictions & budgets in a jiffy with fewer errors.
Today, Budgeting and Forecasting need not be a cumbersome process. There is specialized software in this category that you utilize. You must have careful when choosing a Budgeting and Forecasting software. Here are some questions all purchasers should think about before looking for the right partner:
- Am I looking for a cloud solution or an on-premise hosted solution?
- Do I want an Excel replacement software or a software that works closely with Excel?