By Steve Player
If you lead an organization or work to support that leader, you are often faced with deciding what should be done next. That decision is easier to make if you knew what was going to happen in the future.
Yet understanding the future is clouded by an increasingly complex world that seems to be moving faster and faster with an ever- expanding array of options. If this task leaves your head spinning, you have come to the right place. This book will get you started on understanding how financial forecasting can help you and your organization improve decision making.
Many finance organizations struggle in helping to support decision makers. They spend the vast majority of their time diligently working to accurately close the books. Accurate financial statements are needed but in most cases they are after-the-fact confirmations of decisions already made. Although this work is important it can crowd out more useful approaches.
Many finance teams seek to speed up the closing of their books.
Even if highly successful, operational managers are left with trying to drive forward while looking at the rearview mirror. Progressive finance teams are turning this around and using the entire front windshield to help guide the organization. This book will help you do a better job of looking forward.
How can organizations of any size–small, medium, or large–do a better job of being prepared for whatever might come their way? Many have successfully answered this question by shifting their focus to forward-looking forecasting.
This book will show you how you and your organization can get started.
What I like about Philip’s book is the very practical way it helps organizations get started in forecasting.
Many organizations are over- whelmed by the vast array of potential drivers they could use. Some who have tried to use rolling forecasts get lost trying to create the perfect predictive logic diagram. This book takes a simpler approach. It reduces complexity by simply asking what two numbers can you multiply together to forecast the direction of your business. By starting with the simple equation of price multiplied by quantity, virtually any business can get started with forecasting quickly.
For those who think this is too simplistic, I remember what Zig Ziglar once told me. He said, “Anything worth doing is worth doing poorly–until you can learn how to do it well.” The basic approach presented in this book will help your organization get started regard- less of size. My experience is that it is much easier to refine and improve a model than to discuss it in abstract.
As you and your team work with live financial models, it will be much easier to refine those models adding additional insights and knowledge.
Working with real data to continuously improve your model provides faster time to benefits and helps you test different potential factors. It may be the quickest way to fully discover the algorithms of your business.
The hands-on approach used in this book will quickly show you the math behind forecasting calculations.
There is a specific chapter showing how numbers flow across all the projected statements of income and expense, assets and liabilities, and cash flows. You can work these in the book or download the supporting schedules from the book’s website.
This book will show how to leverage your historical financial statements to validate whether your forecasts are realistic based on your history. It provides a way to test potential alternative strategies.
Finance organizations are learning that they must stop doing dumb stuff like taking three to six months to complete an annual budget, wasting time on monthly budget variations when the budget was based on assumptions that have long since turned stale, and driving everything off a financial cycle instead of the natural business cycle.
Today’s world is moving toward twenty-first century technology, which allows continuous monitoring of operations, real-time reconciliation of cash accounts at any point they are needed, and the need for finance teams to stand on the bridge of the ship next to the leaders of the business. That way they help decide what to do in the future instead of being stuck on the back of the ship counting what has happened in the past.
To be ready for this world we need forward-looking, driver-based rolling forecasts telling us what will most likely happen.
But because the future is not certain a great finance organization will also have several scenario plans of what could happen instead–with both upside and downside contingencies.
For the upside opportunities, we will have plans to seize those opportunities before our competitors. For the downside risks, we will have plans to protect our organization and properly position it for any fallout. In all cases, we will also be looking at leading indicators that tell us which reality is becoming more likely and when we need to swing into action.
This book will not show you how to perfectly predict the future. I have not seen a book that can do that. But this book will get you started on a journey to better understand what has happened and what could happen.
And if you use this book to help your organization develop plans to deal with both the upside and the downside, then you will be well on your way to the goal, which is to Live Future Ready!
I look forward to seeing you on the journey. Best Regards,
March 17, 2017
Author, Future Ready: How to Master Business Forecasting, Director, Beyond Budgeting Round Table North America Managing, Director, Live Future Ready
A Quick Start Guide to Financial Forecasting:
Discover the Secret to Driving Growth, Profitability, and Cash Flow Higher
This book provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. It will transform the financial future of your company and help you make better, faster, smarter financial decisions.
Too many entrepreneurs and CEOs today are feeling more like passengers than drivers in their business. They’re staring at their rearview mirror as they bounce along in the passenger seat. Their company is careening along on the highway of business as they wonder and worry about where their business might end up financially.
A reliable financial forecast solves this problem by providing a clear view through the financial windshield of your business. It creates the visibility and clarity you need to drive your company toward a bigger and brighter financial future.
What if you had answers to questions like:
What’s about to happen to my profitability and cash flow?
How much cash can we distribute to the owners of the business?
How long will it take to pay off our debt?
What will our taxable income be this year?
A reliable financial forecast puts the answers to these questions at your fingertips. It helps you take control of your profitability and cash flow because it gives you answers to the most important financial questions you have to deal with every day.
Put yourself in the driver’s seat of your business by tapping into the unique and exciting benefits that financial forecasting can unlock for you.
Buy the book at Bookmasters (including a PDF version you can download immediately).
The 10 Cash Flow Rules You Can’t Afford to Ignore
The single biggest reason the small business failure rate is so high today is this one simple fact: Most business owners don’t really know what’s going on with their most precious asset – their cash.
Despite the fact that cash is the lifeblood of the business, the fuel that keeps the engine running, most business owners don’t truly understand thier cash flow. As a result, more businesses are failing today than ever before.
Never Run Out of Cash shows you a powerful and simple set of principles that will transform the way you manage your business from this point forward.
It’s an easy-to-understand, here’s exactly how you do it approach to understanding and managing your cash flow.
Understanding Your Cash Flow – In Less Than 10 Minutes
This online course teaches you a simple, step-by-step approach to understanding and managing your cash flow. Here are the two unique promises I make to you in this course:
- I’ll show you how to understand your cash flow in less than 10 minutes
- I’ll show you how to explain what happened to your cash last month to your business partner or banker (or maybe even your spouse) in a 2-minute conversation.
I take off my CPA hat and I speak in the language every business owner can relate to. No jargon. No stuffy financial rambling. Just a simple, common sense approach that only takes 10 minutes a month.
The course includes:
- The video presentation of the course. This is a screencast that you can watch and listen to on your favorite device. I walk you through the step-by-step process and show you how to understand your cash flow in less than 10 minutes a month.
- The course workbook. This is a downloadable workbook to help you get a fast start with the course material. It has all the examples and everything you need to complete your first Cash Flow Focus Report.
- The Cash Flow Focus Report. You get the links to download the PDF or spreadsheet version of the Cash Flow Focus Report. 10 minutes a month with this unique and simple tool and you will wonder how you ever got by without it.
- The slides from the presentation. You can download a document with a copy of each slide from the presentation so you can go back to any specific example or portion of the recorded presentation.
I provide a no questions asked, 100% refund guarantee with the course. If you don’t love the course I’ll refund 100% of the purchase price.
Learn more about the course.
If you have already purchased the course (and/or the related coaching), get the full course here.