Advantages of Forecasting

May 22, 2019

David Hadley

Financial forecasts are future predictions of your business finances, as compared to statements, which provide details of actual results of progress, They can assist in managing your finances.

The following are five ways forecasting can help your business:

1. Focus on the Future
   By forecasting on a regular basis, it forces you to continually think about your future and where your business is headed. This will allow you to foresee changing market trends and stay ahead of your competition.
2. Customer Satisfaction
   Keep your customers satisfied by providing them with the product they want, when they want it. The advantage of forecasting in business will help predict product demand so that enough product (or staffing) is available to fill customer orders particularly if demand is seasonal.
3. Credit
   If you expect to apply for a loan or line of credit, your financial institution will likely ask you to provide them with forecasting reports with your submission.
4. Cash Flow
   Forecasting can give you the intelligence to anticipate a downturn in sales and plan for it. Likewise, it can alert you to periods when you can expect an increase in sales and you can organise additional staffing ahead of time.
5. Progress Towards Goals
   If you can’t measure it, you can’t improve it. Setting goals alongside your business forecast allows you to track your progress and plan your operations that are aligned to what you want to achieve.

If you wish to learn more, please feel free to contact us.