BUDGET & FORECAST
Set priorities and focus energies where they are needed most, based on insight from historical performance.
What is Budget and Forecast?
A budget is a process and tool that produces an income and expense projection over a fixed period of time, typically based on knowledge of an allocation of funds or resources. The process aims to see how realistic a plan is for achieving a specific business objective. It is generally completed annually and stays fixed as a benchmark for actual performance.
A forecast is complementary to a budget. This is more flexible, in that it allows for periodic re-evaluation of assumptions based on recent changes in the business environment. A forecast is typically 'Rolling', in that it can be produced based on a future, moving time horizon (next 6 months, next 9 months, next 12 months). The process draws on knowledge from key business stakeholders with support from a business partner for scenario modelling.
What's the need?
Budgeting and Forecasting are an SMEs next step for expansion. They are essential to understand if your growth plan is realistic. A budget and forecast then becomes a valuable tool to measure actual performance against a previous expectation. This is valuable because it serves as a reminder to management as to whether original objectives are on track, or if stategic changes are needed.
• Identify weakness in business strategy
• Key to foresee risk and opportunities
• Acts as a benchmark for actuals
• Uses up time and resources
• Can be outdated quickly
• May be based on unrealistic projections
Can we help?
Implementing a budget and forecast process is not easy, but they are often worth the effort, enabling more informed strategic decisions. The business planning process is not a one size fits all - it requires an understanding of the business, specific objectives and the wider business environment, through research, discussion and agreement with you.
Having worked in this area within industry, we understand the complexities and challenges. With our background and experience, we can collaborate with your SME during the process of budget & forecasting, with the aim of delivering financial models tailored to your business.