Times they are a changin’. Your financial numbers should be changing too. In these changing times, businesses need to be more agile and make decisions based on updated information – and this is especially true when it comes to your business forecasting.
We all know it to be true: you can’t make accurate decisions based on inaccurate or outdated information. However, if you’re basing those decisions on annual budgeting and forecasts, chances are your information is older than it should be.
Annual budgeting used to be the way for most companies. What many companies are now realizing though is that business is changing quickly, and numbers offered by annual budgeting quickly become outdated. Companies are moving to rolling or quarterly forecasts to meet the change head on.
Most companies are hesitant to switch to more frequent budgeting and fear the difficulty that the change will bring.
Here are some tips to make the process of switching easier on everyone involved.
- Explain why you’re making the change. Again, since the switch can be confusing at first, clearly define your goals and explain why the change is being made. Provide the appropriate training whenever it is required.
- Don’t move too quickly. Moving to a system of quarterly or rolling forecasts can be somewhat challenging to implement initially, so start off slow. Begin with a few departments, iron out the kinks, then use what works to get things rolling with the rest.
- Maintain consistency. Once you’ve implemented the new system, be sure to remain consistent in its use. Try to use the same process each time. This will ensure a smooth transition with lasting results.
- Let your technology simplify the process. Far too often, when merging to rolling forecasts, we see companies relying exclusively on Excel encounter problems. Excel is a great budgeting and forecasting tool, but it does have its limitations. To get the most from your transition to quarterly or rolling forecasts, use a corporate performance management system to automate your forecasting to make things easier.
If your goal is to use business forecasting as a tool and not just for tracking accountability to numbers, quarterly or rolling forecasts are the way to go.
At True Sky, we can help you get set up. Our corporate performance management tool makes annual business forecasting a thing of the past. We can help you succeed. Call us today at 1 855 878 3759 or visit www.truesky.com for more information.