What is Budgeting/Forecasting 

  1. A Budget is a detailed view of expected revenues, related expenses, overhead, profits (P&L), financial position (Balance Sheet) and Cash Flow for a given time in the future.
  2. A forecast is generally prepared after the Budget and is a higher level update view of the expectations of the future period in question.

Benefits of efficient Budgeting/Forecasting

  1. Creates a financial road map for business operations.
  2. Aids is planning for future growth and expansion.
  3. Allows a formal thought process to evaluate sources and levels of revenue and related spending to support growth.
  4. Allows for a formal routine review of progress against targets.  
  5. Aids in cash flow and capital requirement planning.

Is your Budgeting/Forecasting system working efficiently

  1. Does your business prepare a budget and/or a forecast?
  2. Is there participation at all (appropriate) levels in the development and review of budgets/forecasts?
  3. Is management/supervisory using these items as a control tool?
  4. Are actual vs. budgets/forecasts routinely reviewed and variances highlighted/addressed?

Approach to improve your Budgeting/Forecasting process

  1. Develop an understanding of what is currently in place.
  2. Develop an understanding of what would be appropriate.
  3. Develop a Gap Analysis.
  4. Develop a Plan to close gaps.
  5. Ensure proper buy-in and training.
  6. Implement the Plan.

MDT Business Consulting