10 reasons why annual budgeting is a waste of time

The more enlightened amongst you may have picked up murmurings that annual budgeting has become an increasingly discredited activity: rolling 12 or 15 month forecasting is the way to go. For those of you who have not woken up to this revelation, here are 10 reasons why annual budgeting is a waste of time. There is confusion about what a … Read More

Forecasting Tip #6 – My Top 6 Forecasting Do’s & Don’ts

Do prepare a regular forecast. It’s surprising how many businesses simply do not prepare a regular forecast. How do managers in these businesses know what is coming down the road? Don’t confuse a target with a forecast. A target is what you would like to achieve. A forecast is an honest appraisal of what you think you will achieve. These … Read More

Forecasting Tip #5 – Make friends while you forecast

One person working on their own lacks sufficient information and the perspective to forecast well. Forecast information should be gathered from, and discussed with, as many relevant people as is possible in the time available. For decent financial forecasts, as a minimum I would be looking to include people from Sales Operations and Finance. With wider involvement, if I can … Read More

Forecasting Tip #4 – Don’t disappoint

People don’t like to be disappointed. The management time you will save, not to mention the improvement in your credibility you will achieve by beating your forecast, mean that it is worth taking the time to try to make this happen. Start by asking yourself the following questions: Who am I preparing this forecast for? Will they prefer me to … Read More

Forecasting Tip #3 – Track your performance

If you want to get better at forecasting, you and your team need to take time to look at how good your last forecast was and why it differed from the actual outcome. With the time pressures of working life, it is not surprising that this step is missed. But if you get into the habit of a quick review … Read More

Forecasting Tip #2 – Always forecast a range of outcomes

Unless you have the gift of second sight or are a time traveller, you do not know how the future of your business will work out. Other than for very low risk operations, there is always going to be a range of future outcomes that are possible. The purpose of forecasting is to outline in financial terms what this range … Read More

Forecasting Tip #1 – Distinguish between forecasts and targets

This is the first in a series of tips on forecasting. These will run alongside our tips on Pricing (and maybe others to come). A forecast is a statement about events whose actual outcomes have not yet been observed. In business, forecasts are made to help manage operations, cashflow and expectations. Risk and uncertainty are central to forecasting. A target … Read More