Benefits of Financial Forecasting for Long-Range Planning and Asset Tracking
Small retail businesses, restaurants, large corporations, and even government entities are recognizing the benefits of having an effective asset tracking tool. These trackers are a useful resource for numerous reasons, but the most notable may be their ability to assist in an area which most companies place most of their focus: planning for long-term viability.
The lack of planning and control of cash is the reason given most frequently by small business owners after their failure. A financial forecast is simply a financial plan or budget for your business in order to properly track and maintain a steady flow of cash both incoming and outgoing. This forecast is built on two main outcomes for the business: Projected income and Expenses.
Having a proper tracking system, either a ledger or software like assetGEEK, helps with these projections. By comparing business flow and incoming cash in previous months, simple formulas can assist you in projecting the amount of money your company will be bringing in. Averaging the weight of expenses in previous months will allow you to determine the profitability of the coming months. This will also allow you to see where the most money is being made and spent, allowing adjustments to be made to your business model where adjustments need made.
The more data you have available, the more information you have to make informed decisions regarding the busiest parts of your fiscal year. Having an accurate tracking system allows you to compare and plan for future ventures, allow for a set savings each month from the capital gain in order to make upgrades to your current business, and gives businesses and idea of their profitability from one year to the next, providing forecast information which may spark the interest of future investors.