What are business financial projections and forecasts?
When planning the future growth of your business, it is important to prepare budgets and forecasts in order to understand your future profitability and to ensure that you are prepared for any cash flow issues or cyclical variations.
Being aware of your financial requirements will enable you to take the necessary steps to safeguard against potential difficulties that may lie ahead. Reviewing your company’s current performance against forecasts can also enable you to capitalise on opportunities and trends.
It is important to distinguish between financial planning and financial forecasts. While financial forecasts utilise data to produce an intelligent estimate of future income and expenditure, financial plans detail the strategy that a business will apply to its finances and how it will harness its earnings.
Why do I need business financial projections and forecasts?
Financial projections and forecasts bring the dual benefit of helping businesses to identify investment opportunities and identifying threats.
Well-kept financial records and regularly updated forecasts allow business owners and directors to assess the areas where cash flow is likely to increase, signaling opportunities for strategic investment and expansion.
Equally, a shortfall in cash can catch any business off guard, so it is important to take steps to foresee financial threats before they become a problem.
The information produced by financial projections and forecasts is often invaluable for when communicating with lenders and investors at times when new or additional borrowing facilities are required.
Projections and forecasts with Simpson Wood
The team of qualified accountants at Simpson Wood has a long history of using financial projections and forecasts to help businesses plan for future success.
Analysis is one of our key strengths, and we know the value of delving deep into financial data to produce insights that inform intelligent decision-making. We aim to give our clients the superpower of enhanced vision, allowing them to maintain healthy cash flow and gain an edge over their competitors.
We believe in listening to our clients carefully to ascertain the values, drives and challenges that lie at the heart of their businesses. We keep what we learn in mind when we produce financial modeling reports, projections and forecasts, ensuring that the insights we share lead to actionable positive change.
If you’d like to find out how our business financial projections and forecasts can help you, contact us today.
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