Financial Forecasting: The Future is Bright
See how forecasting can be the key to securing a successful financial future.
If you’ve been around our team much, you may have heard us say: “The future is bright.” WeCreate’s culture is always looking ahead for what’s new, what’s next, and how we can brighten the future for both our clients and employees.
I handle all things accounting and finance here at WeCreate to ensure the future stays bright financially! The most important part of my role is looking into the future as we grow our company and expand our team.
What is Forecasting, and Why Should You Care?
Forecasting is the key to our financial success here. It’s the process of making predictions of future business performance based on past data and present leadership insight. Forecasting is used by our leadership team as a decision-making tool and helps with budgeting, planning, and estimating future growth.
It’s Raining Data
I’d like to think of forecasting in business much like a meteorologist forecasting the weather. Meteorologists take data from a variety of sources to issue weather forecasts and also prepare advisories and warnings when severe weather is predicted. They can see storms approaching and are able to inform those to prepare. They also predict sunny days, but sometimes occasional showers pop up. In business, I’m forecasting for sunny days and if we see storms approaching, we modify our approach to ensure financial success. We also plan for when occasional showers pop up, too.
“Historical data tells us where we’ve been, but not where we’re going. Forecasting allows us not only to make faster decisions but educated decisions that are ultimately best suited for growth and a successful future for our entire team.”Katie Fentress, President & COO
Traditionally, accountants only provided historical financial results. That would be like the meteorologist only telling you the weather for yesterday. Historical financial statements are important and valuable, but with our fast-paced industry, it’s important for our leadership to know where we’ve been, where we are, and where we’re going.
Many small to medium size businesses operate from week to week and cross their fingers that they have enough cash to sustain business as they try to innovate and grow. Forecasting lets us have a roadmap and put our dreams, goals, and visions in the front view. For example, we weekly look at our cash forecasting for the next twelve weeks and then out to the next six months. We are looking at our current projects, along with revenue and expenses. We then look at our goals and dreams as a company for the coming years. These dreams can include new industries, new team member roles, new office locations, new partnerships, and more. We then analyze where we are and where we want to go. This gives us the data to set goals for our business development team to accomplish. We then re-evaluate and adjust as needed to keep moving forward into our bright future.
The Real-Time Data Challenge
Part of my process is to keep our accounting records on real-time data. This is no small feat. On any day, I can be asked to provide up-to-the-day financial data so the business can make crucial decisions in real-time. This crucial data helps us predict the future continuously through forecasting. I use QuickBooks Online and utilize their bank feeds, which allows me to import every receipt and expense without having to manually input any data. Syncing our bank transactions is a tool I absolutely love. I also utilize setting up rules for categorizations, which speeds up our real-time data accounting.
In Forecasting, We Trust
At WeCreate, finance has a seat at the table of our leadership team and is an integral part of our business structure, growth, and future success.
Finance can give guidance and analysis on business decisions. Finance has been able to provide data, predictions, insights about profitability and risks, and share analysis to support our company’s strategy and growth. Such examples include:
- Payroll utilization analysis
- Compensation structure reviews
- Weekly productivity scorecards
- Weekly cash forecasting
- Monthly project forecasting
- Financial annual operating plan
- Guidance on financial position and structure for our goals and growth
If you are not yet receiving real-time data or forecasting in your business, reach out to your accountant, finance professional, or CPA. You can also check out two of my favorite online resources:
- Chris Hervochon, CPA, CVA, owns an accounting firm specifically for marketing agencies and creative professionals and has a ton of free resources, including YouTube videos, ebooks, guides, and an awesome marketing industry e-newsletter.
- Marcel Petitpas owns a technology-leveraged service firm that specializes in helping agencies measure and improve their performance. He also has a ton of free toolkits, blogs, and podcasts.
Then, work with us and see your bright future come to life! Our teams can impact your financial success through our creative services, increasing your revenue and providing the base for a bright future.
We’d love to continue the conversation with you on social media! Join us there to share your thoughts, or feel free to reach out to us directly with any questions.
Most Recent Posts
February 19, 2024