Where do you see yourself 5 to 10 years from now? You might have been asked this proverbial question when searching for a job. It indicates the essence of goal setting for development and success. Life without a goal is like a race without a finish line—it would take us nowhere.
Like individuals, business organizations have goals, too. The same question would also be applicable in this scenario: Where do you want your organization to be 5 years from now? 10 years?
When your business doesn’t have a plan or a clear vision, chances are you’re missing out on a huge advantage for success. The good thing in business, goal setting can be expressed through Financial Forecast.
What is a Financial Forecast?
A Financial Forecast is a tool that business organizations use to establish a plan, where the company, heading at the frontline, expresses in revenue estimates the goals to be achieved in the near future.
Why is there a need for an accurate Financial Forecast?
Accurate Financial Forecast spells the difference between success and failure of a business organization. Forecast is more future-oriented as it develops foresight which gives CFOs the ability to shape the future even in turbulent times.
Financial Forecast provides a clear path of where you want your business to go and will support an organization’s growth goals. Since growth goals require funding, you will also have to raise capital to finance growth goals. Investors are interested more than the story, relationships, and luck. They need to know that the business organization knows how it’s going to succeed.
A plan will take you to places. Failure to plan is planning to fail – a relentless line that teaches the importance of having a clear, direct, and defined path leading us from where we are to where we want to go.
On Forecasting, Warren Buffet states he would rather be approximately right than precisely wrong!
Forecasting is not a plug and play exercise – it’s an agile method that requires frequent reassessment and adaptation. A wise CFO uses the forecast as a guide in the business, especially in comparing forecast against actuals to ensure they’re on track.
Small and medium-sized businesses often lack accurate forecast or do not have a forecast at all. It may be difficult for them to put everything together without financial knowledge. Planning to quantify long-term goals and huge gaps in Accounts Payables and Accounts Receivables on the one hand, and raising capital on the other, might seem overwhelming. There are no easy answers to questions about strategy and growth goals.
Perhaps it’s time to consider to a part-time CFO – we’d be happy to help!
CRESCO Accounting Ltd provides high-level expertise to an organization regardless of size. We are conveniently located at F02-04, Oceanic House, Providence Estate, Mahé, Seychelles.