Keeping an eye on the forecast for your business
We here at Lombard Accountants know that in Ireland, we talk more than most about the weather forecast. But do you keep an eye on your companies business forecast? A business forecast tells us if there’s bad weather (poor cash flow) on the horizon based on the direction your company is heading.
The difference between a business forecast and a weather forecast is that, when the business forecast is showing bad weather, you can do something about it to make the sun come out. The forecast will tell you what’s going well and what’s not, so you can make adjustments to reduce the impact of bad weather.
Are you unsure of where to start with your company’s business forecast? The Lombard Accountants team has a list of what your forecast should tell you:
- If you have enough sales in the pipeline to give you the desired level of profit for the year.
- Whether your margins are appropriate.
- If you need to review your pricing or production processes.
- If your business is running as efficiently as it could be.
- Where savings can be made.
- Whether you should invest more to get a better return.
- How much money you need to set aside for tax.
- How much money you can draw out of the business each month without running short.
- How much debt you’ll be able to pay off.
- Whether or not you’ll be able to meet all of the bank’s requirements.
Just as you wouldn’t go hiking without checking the forecast, you shouldn’t run your business without an annual forecast. So, trust us here at Lombard Accountants when we say that checking the forecast for your business is advisable all year round!
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