Top Owners and Executives know the complexity of forecasting financials for growth.
It’s a process that requires more than bank account statements, cash flow, and a gut feeling.
This process requires spot-on, accurate financial reporting.
Without accurate financials, your next business decision could be the beginning of the end for your company.
A “bad decision” based on inaccurate financials can sink most businesses. This is due to things like overextension for growth, taking on loans that can’t be serviced, and investing in opportunities that turn out to be duds.
This is why accurate financial forecasting is so important for Owners and Executives to get right.
With more than 15 years of experience, I deliver spot-on, accurate reports weekly, monthly, quarterly, or whenever you’d like so you know exactly where your business stands.
This is where outsourced accounting and bookkeeping can help you a ton with your financial forecasting for growth. I’m your local, expert outsourced accounting department who does it all for a third of the cost.
As your Outsourced Accounting Department, I’m going to share the 5 factors that impact financial forecasting so you know what to look for when getting help from me.
5 Huge Factors that Impact Financial Forecasting
There are 5 primary factors that impact the accuracy of your financial forecasting.
If you don’t know these when attempting to forecast on your own, you are setting your next business decision up for failure.
#1. Subtle Market or Industry Changes
The cost of goods, the price of competitor products, or the expense of employees (and more) are all factors that can subtly shift your financial forecasting. While most of these external factors are out of your control, they can greatly impact how you forecast financial performance and plan for growth.
#2. Economic Shifts
Inflation, stock market price, global supply chain issues all fit into “economic shifts.” These can greatly impact your financial forecasting, which means your local, state, regional, national, or international business must pay more attention to the world around it. As an Owner or Executive, you’re in business with the world, not just your customers.
#3. Production Backlog
Either in your own company or by your vendor, a production backlog could mean more than “running out of stock.” This bigger issue could lead to customer dissatisfaction, loss of customers, and negative reputation buildup. All of these lead to fewer people buying from you, which leads to less cash flow. This is the type of issue that doesn’t show up on your financials unless you’re paying attention with a fine-toothed comb. Miss this on a financial forecast and you could doom your business to more than a bad couple quarters.
#4. Mergers and Acquisitions
Mergers and acquisitions at any level of business tend to shake things up. If you see a merger or acquisition on the horizon for your company or a direct competitor’s, then get ready for the ground to shark beneath your feet for a few months to a few years. Financial forecasting to and through a merger or acquisition can be rocky if done incorrectly. One false step, and it could send your business into a downward spiral that’s near impossible to save. This is why it’s important to keep one eye on your competitors so you can see this type of shift coming from miles away.
#5. Supply Chain Issues
Whether across the state or around the globe, a supply chain issue can negatively impact your bottom line. The late or non-arrival of goods means you’re not able to create cash flow. This means that financial forecasting a quarter, year, or 5 years out can become grim. As you saw with the Suez canal, one boat gets stuck, and the entire world feels the impact. You must take events like this into account when forecasting, or you put your business at risk.
It’s not enough to keep track of your financials in a spreadsheet and hope your AI Bookkeeper gets it right.
With more than 15 years of experience, I deliver spot-on, accurate reports weekly, monthly, quarterly, or whenever you’d like so you know exactly where your business stands.
How Do I Hire Virtual, Outsourced Bookkeeping & Local Accounting Services for Accurate Financial Forecasting?
Hire me, your Local, Master Outsourced Bookkeeper & Expert Virtual Accountant, today.
I bring your books current the very first time. Bringing back months and years!
I deliver accurate, spot-on reports weekly, monthly, quarterly, or whenever you like without fail.
And, I help you forecast your financial future so you can know exactly where your business stands financially.
Don’t let behind books and inaccurate accounting get in the way of growing your business.
