Whatever sector your clients are active in, the chances are they want to look to the future with some confidence, have a clear idea of potential growth areas - and those that are riskier - and have a good estimation of future earnings. Providing insight into these crucial areas will add serious value to your role as an advisor and help your accountancy firm win new business as prospective clients recognise the importance of the service you offer.
To achieve this, business forecasting software can be invaluable, offering tools that help to illustrate business trajectory and create easy-to-understand financial projections. And, by linking these tools with your accounting software, you can deliver dynamic reports to keep clients updated and agile, whatever the situation.
Business forecasting is the process of predicting the future sales, profit, expenses and resources of a business based on the analysis of historical data. While, as an accountant, you could simply look at previous figures and assume future outcomes would be similar, business forecasting software will help you take a much more rounded view and deliver more accurate results. It will consider social and economic factors that you may not even be aware of and utilise financial data to make accurate projections to help your clients make better decisions about everything from marketing to production.
Business forecasting is a crucial tool when it comes to planning. By helping your clients understand potential future market conditions, they can plan their strategies accordingly. The ultimate goal, of course, is to help your clients increase their profits, and business forecasting will certainly help here. However, there are other areas of the business that will also be impacted positively. For example, having greater awareness of expected demand throughout a year can help avoid product shortages or surplus; better financial insight will make it less likely that overheads will be underestimated.
Overall, the hard data from business forecasting can speed up decision-making across multiple aspects of a business, helping clients meet both long- and short-term goals and encouraging them to rely on your accountancy firm for ever-more insight.
Aside from aiding decision making, business forecasting offers several additional advantages.
Starting any business takes a leap of faith, and there will always be uncertainties. However, business forecasting can help provide some clarity with key forecasts looking at areas such as demand, finances, and competitor activity that can be crucial to assisting operations in running more smoothly and boosting the chances of success. If your accountancy firm provides accurate insights to clients as they begin their journey in business, you can help build trust in your services and ensure they rely on you for years to come.
Offering the opportunity to improve a business' financial awareness both now and in the longer term is a sure-fire way to attract clients to your firm. With business forecasting, you can provide detail on sales forecasts, highlight where more capital may be needed, explain expenses and monitor key metrics. If a business plans to make changes such as expanding, investing in infrastructure or developing new product or service offerings, this type of detail is essential. And remember, this isn't a one-off process. To deliver accurate, meaningful data, financial forecasting should be done on an ongoing basis.
A good leadership team needs to be constantly thinking about and planning for the future, and with business forecasting software, you can help them do this. Forecasting will help decision-makers develop a clearer vision of the future direction of the business and help them implement a plan to achieve it. It can also encourage teams to work together to develop the information that feeds into these forecasts, helping to improve communication too. As the business grows, your skills will become even more critical as forecasting becomes more complex but more necessary.
Whether it's ensuring stock is at the right level for customer demand or the correct number of employees are available when needed, forecasting can ensure better utilisation of resources by revealing any possible shortfalls or areas of excess in advance. This allows management to fill gaps before they cause problems. It can also have the added benefit of improving customer satisfaction as orders will be fulfilled quickly and smoothly.
By utilising data from an accurate forecast, businesses can also optimise their budget planning. This will include identifying where budgets can be reduced without impacting business success.
All of these benefits and more mean that, overall, forecasting can lead to a business that is successful in the present and prepared for the future. Systematic forecasting ensures the business can operate effectively and plan for potential difficulties while making the most of opportunities, and your accountancy firm will be at the heart of this.
Ask any business owner what they need, and many will say clear, accurate, timely information, as much certainty as possible and actionable insights that can help their business succeed. Business forecasting software can deliver all of this quickly and easily, meaning you can immediately demonstrate the benefit your accountancy services will bring while freeing up management's time to complete other essential tasks.
Not only that, but business forecasting software can help to make potentially complex information easy to understand, so you don't have to bombard your client with lengthy documents and multiple data points. Using software, you'll generate user-friendly reports that are both accurate and digestible. This can also help you to raise new ideas and start new conversations. For example, forecasting software could identify potential areas for cost-cutting or highlight a cash surplus and the opportunities for reinvesting it.
To develop your role as an adviser, you could even create a variety of forecasts based on different assumptions and actions to really dig down into key areas of the business. This can encourage clients to see their business in new ways and demonstrate the impact their decisions could have on business success.
Offering this ongoing insight, rather than simply delivering a retrospective financial report, is an invaluable service and one that will undoubtedly help your firm attract and retain clients.
When it comes to business forecasting software tools, apps such as prediction, forecasting and reporting tool Futrli, AI platform Forecast, Spotlight for scenarios and budget planning, Fathom for reporting, KPIs and analysis, and DataRails for real-time data analysis are all useful tools. These apps can take the data from your accounting software and create a draft forecast, giving you a great starting point to begin helping your clients.