As we approach the end of the year, many businesses start to prepare for the next fiscal year. Research has said that companies that budget and forecast are 10% more likely to hit their goals for the following year.
Below we break down 5 ways to help improve your budgeting and forecasting for next year:
Be Flexible
Budgets and predictions which are not flexible are usually not helpful. This is because as the year goes on, things change, and you need to be able to consider those changes and how they will impact your company. Making judgments based on educated estimates can result in a lot of costly choices. Your organization will perform better and more accurately if you incorporate flexibility into your forecasting and budgeting processes.
Be Clear
Forecasting helps you make better business decisions by helping to predict your company’s financial future with as much accuracy as possible. Additionally, you will need to understand what motivates your forecasting predictions; otherwise, they would just be educated guesses that will not be relevant to your company’s objectives.
Plan for Various Outcomes
As much as you wish you can, you can’t plan for everything. However, you can at least have a general concept of some of the potential roadblocks. The best way to do this is to examine market and economic trends that could have a detrimental effect on your business. A rolling forecast is useful for keeping track of any developments, whether they are positive or negative. Rolling forecasts also give you the flexibility to change course as needed.
Involve your Teams
Everyone at your company is affected by budgeting. It is a good idea to keep your employees/department heads aware of changes and ask for contributions/suggestions. They may have great ideas to help better forecast or will need to know what to expect for next year so they can plan their departments ahead of time.
Constantly Revisit
By reviewing your budget on a regular basis or in between milestones, you can better manage your spending. To better prepare yourself for the year ahead, you should also think about previous market trends.
For more tips to help plan for next year, visit here.