Business opportunities have expanded as technology has developed, giving entrepreneurs more options for starting and running a business. While for some businesses, startup capital is lower and a physical building isn’t needed, still, financial forecasting is a universal business need. In this regard, let’s discuss the role of balancing business growth with financial forecasting.
Separating Fact from Fiction
Every business owner or manager has some method of forecasting the business’s finances, yet can this system be improved upon and how would it help? Essentially, the more accurate, accessible, and understandable the forecast is, the more helpful it is. When owners or managers have accurate projections, their everyday decisions will reflect this knowledge.
Separating fact from fiction means removing the mysterious unknown from the finances. Instead of moving ahead with a feeling, owners can use technology to crunch the numbers to a near certainty in real-time. Furthermore, partnering with financial expertise will validate and highlight any: compliance, tax, insurance, or other issue that may arise.
Critical Growth Periods
There are critical growth periods for businesses that must be navigated carefully, such as: starting a business, acquisitions, partner buyouts, expansions, projects, and transitions. Many times, when a business is struggling is when they’ll consider a transition to a new business system or model. Either way, during critical growth periods is when financial forecasting is most useful.
The strategy used to navigate through these periods needs to be based on accurate financial forecasts. Using technology, owners can access their financial data and projections in the cloud with their smartphones, tablets, or computers. For instance, they can see their accounts payable and receivable, and evaluate historical sales patterns.
While businesses may have Quickbooks or another accounting software, as well as CRM, ERP, and WMS software solutions, do they have a dedicated CFO to interpret the data? The CFO would also understand how each move would affect compliance, insurance, taxes, and financing.
Basically, during critical growth periods, businesses will benefit by having their holistic financial data condensed and centralized in routine reports, as well as knowing the exact tax and compliance issues involved with each financial move.
Drilling Down and Filling the Gaps
Financial forecasting is something every entrepreneur does in some form, yet in the process of business growth, complexities do arise. Often, these complexities take time away from strategic planning, tax planning, and financial forecasting; owners and managers may find themselves neglecting the details from a lack of time and resources.
Drilling down on the business’s financial details means understanding: historical patterns, market trends, available capital, total assets, total expenses, etc. Once the business has some historical data to decipher, patterns and trends will emerge; any gaps can then be strategically remedied and filled.
Financial forecasting helps businesses understand how to fill in these gaps. The remedy can be tested and tried before being deployed and used. Although there’s always risk involved with starting and running a business, much of the risk can be removed through accurate financial forecasting. With meaningful data and expert advice, owners can avoid high risk moves and purposefully navigate their business’s growth.
Outsourcing Financial Forecasting Services
With cloud and mobile computing technologies, outsourcing financial forecasting services is easy and affordable. The best part about partnering with a comprehensive CPA service, like GMLCPA, is businesses can outsource their accounting and taxes as well. Financial forecasting is part of our CFO services, which can be facilitated virtually or in-person.
GMLCPA is located in Tucson, AZ for those interested in stopping by, otherwise, our cloud accounting solutions can easily be remotely used throughout the country. Our comprehensive services go beyond mere accounting, payroll, and tax preparation; they also include strategic business advice and consulting, including: tax planning, financial forecasting, cash flow management and projection, systems design and implementation, risk management, financing assistance, profitability analysis, and much more.
Ultimately, we understand how critical it is to have accurate financial forecasts during critical stages of business growth, along with the knowledge and understanding of the holistic requirements needed to move forward. We’re confident that we have the: solutions, experience, and expertise, to help businesses make their finances work for them. If interested in a free consultation please contact us today.
