There are lies, damn lies and cash flow forecasts but, similar to our approach to business planning, the process of completing sensible forecasts and budgets is far more valuable than the end result.
Financial forecasting generally takes two main routes:
1. One off financial forecasting - usually to apply for finance (borrowing or equity) or to complete a ‘static’ business plan.
Depending on the size and type of finance that the business needs you may need to prepare forecasts over (typically) one, three or five years, either simple cash flow or a full profit and loss, cash flow and balance sheet (known as three way financial forecasting).
2. Ongoing, live financial forecasting - to help manage and plan business activities.
Significantly more valuable is to maintain rolling forecasts that can be flexed to reflect different business decisions and plans. This provides an in-depth understanding of the key metrics that drive the financial performance of the business.
With cloud platforms, maintaining a live forecast is significantly easier than many think.
We provide financial forecasting service from as little as £450 including an initial financial review.