How Forecasting Software Can Impress Your Board
Insights into future cash flow, sales, growth, and other changes are vital for business plans and strategies. If you're a Chief Financial Officer, finance director, financial controller, or head of FP&A, you want to be able to present detailed forecasts to your board and other stakeholders with confidence. With forecasting software, you can impress your board with clear and accurate forecasts and help to keep business performance on the track.
Forecasting is complex
Financial forecasts typically involve a great number of different revenue sources and costs. For larger PLC companies, in particular, balance sheets can come from a diverse range of business units, with varied data and formats.
Seasonal changes, unexpected events, and wider economic circumstances mean that accurate foresight into sales patterns can be challenging. Plus, decisions within the company, like investments or recruitment, can take time to bring results. The inherent complexity, changing circumstances and communication challenges mean that forecasts may be incomplete, inaccurate or out-of-date.
The trouble with spreadsheets
Spreadsheets have for a long time been the standard way of collating and presenting financial data, with data exported from the ERP or other platforms. But they are not so good at expressing multidimensional models with changes over time. What's more, trying to incorporate diverse data sets with inconsistent formats can be difficult and time-consuming. Ad-hoc macros to manage awkward data are notoriously brittle and collaboration can be challenging.
How to Forecast Better
Dedicated accounting forecasting software is designed to handle those inherent complexities that Excel finds challenging. That means it's ideal for financial modelling in larger companies. It can incorporate rapidly changing data from multiple sources like sales, finance, ERP and HR, without the need for custom coding.
Forecasting software handles multidimensional and rolling data analyses with ease. That means financial experts can find the accurate insights they need without distraction by IT complications. This way, accurate forecast reports and visualisations can easily be presented to the board for strategic decision-making.
In dynamic environments, forecasts can never be one-off events. Statistical forecasting software is built with the understanding that data is 'live', so forecasts need to combine detailed knowledge of past and present circumstances as well as a range of projections. The software differentiates between fixed and variable data and can produce rolling forecasts as required. Accuracy in time is highly advantageous for businesses to identify and act on emerging trends. Furthermore, the software's access rights may be configured for key stakeholders, allowing them to contribute data and view accurate rolling forecasts.
Of course, even with the most detailed data, predictions still must leave room for uncertainty. That's why forecasting software must also be able to handle multiple scenarios. The ability to trace through and compare several event courses is invaluable in the boardroom. The consequences of decisions can be combined with the parameters of future unknowns to inform risk management strategies. Consideration of multiple models avoids the risk of nasty shocks and brings confidence that adverse events can be handled more easily.
Find out more
Forecasting software allows you to iron out systemic inaccuracies and planning difficulties emerging from IT complexity or inadequate data coverage. Whatever uncertainty remains can then be mapped and planned for. Dedicated software means you can present your forecasts to the board with confidence.
To find out more about the benefits of dedicated forecasting software and how it can enable more informed business decisions, please call us.
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