Why is it essential to have business forecasts?

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Financial forecasts are essential for managing your business finances, and engaging a bas agent can assist you in creating accurate and reliable predictions. These forecasts involve predicting your business finances in the future instead of relying solely on historical financial statements that can be up to 12 months old and only provide details of actual past results.

By working with a bas agent to create forecasts, you can identify potential profit or cash flow issues on the horizon and take proactive steps to mitigate them. Without financial forecasts and the assistance of a bas agent, it can be challenging to anticipate and prepare for future financial challenges.

Here are 5 simple ways that forecasting can help your business: 

Focus on the Future – forecasting regularly forces you to continually think about your future and where your business is headed. This will allow you to foresee changing market trends and stay ahead of your competition. 

Customer Satisfaction – keep your customers satisfied by providing them with the product they want and when they want it. The advantage of forecasting in your business will help predict product demand so that enough product (or staffing) is available to fulfil customer orders, mainly if demand is seasonal. 

Credit – If you expect to apply for a loan or line of credit, your financial institution will likely ask you to provide them with forecasting reports with your submission. 

Cash Flow – forecasting can give you the intelligence to anticipate a downturn in sales and plan for it. Likewise, it can alert you to periods when you can expect an increase in sales, and you can organise additional staffing and working capital ahead of time. 

Progress Towards Goals – if you can’t measure it, you can’t improve it. Setting goals alongside your business forecast allows you to track your progress and plan your operations aligned to your goals.  

If you have any questions or want to know more about how we can help you with your business forecasting, please do not hesitate to contact us.

Kreston Stanley Williamson Team

*Correct as of May 2018

*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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