The Budgeting and Forecasting process is used to achieve your company’s performance goals and objectives and serves as your master strategic and tactical tool.
In order to increase profits and cash flow you need a plan. A well-developed Budgeting and Forecasting model serves as this plan and can be modified and updated as your business conditions change. Thus giving your decision makers live and relevant information to proactively steer the organization in the right direction.
The benefits of plans, budgets and forecasts can be significant:
• Improved execution of strategy: Ensure that strategies are sensible and costs of execution are well understood. This makes execution more predictable and ultimately more successful.
• Speed and flexibility: Drives forward thinking. Thinking ahead about what the business is likely to do in a predicted circumstance and considering a range of possible outcomes makes it easier to analyze actual results as they happen and know what to do next.
• Working capital management: Drives a better understanding of receipts and payments, orders, deliveries and inventory and facilitates better cash management decisions.
• Efficiency: Identifies and eliminates processes that do not add value. Tracking operational performance to plan can help a business continuously improve its efficiency.