Planning is not only about the long term, it is also about forecasting what is likely to happen in the short term, usually the next 12-24 months. This is particularly important for a number of reasons:

  • for those with revenue responsibility: analyse how sales figures are developing on a month-by-month basis, and how the forecast until the end of the year compares with the budget.
  • for each cost centre: check how the actual expenses compare with the budget for the year.
  • for the CFO and his team: monitor the cash balance at the end of each month and forecast how the cash position will develop.
  • for the company as a whole: monitor financial results month by monthforecast performance until the end of the year, and compare the forecast with the expectations set out in the budget.

The planning tool provided below is a generic template that can be used for any kind of business. Its salient features are as follows:

  • 3 years (36 months) covering the previous year i.e. 2022, the current year i.e. 2023, and the following year i.e. 2024.
  • a commercial model providing a sales forecast along multiple dimensions: by product line (#1, #2, #3, #4), by product ‘component’ (hardware, software, service), by geography (countries, regions).
  • full financial statements including P&L, Cashflow, and Balance Sheet.
  • the forecast for the current year and the following year use a variety of methods, taking into account the recent past on one hand, and the target (budget) for the year on the other hand, also using ratios such as gross margins, DIO for inventories, DSO for sales receivables, DPO for payables.
  • the (monthly) historical data for the previous year and the current year are extracted from Excel tables generated from the ERP system. The columns in these tables include: account number; account name; cost centre number; month number; and account balance.
  • a Cost Centre structure with 20 cost centres, and a Chart of Account structure with 300+ accounts.
  • a cockpit to monitor key financial results, and compare the forecast for the year with the budget for the year, and with results from the previous year.
  • numerous cross-checks to make sure that “no data is forgotten”.
  • numerous charts to visualise how the business is performing. These charts display the forecast for the year, the forecast for next year, the year-to-date actuals, and the results achieved in the previous year. Unusual pattern will stand out and the user of the planning tool can visually cross-check whether the figures shown match his expectations.

Feel free to contact us for a demo if you would like to check the capabilities of the planning tool and whether it matches your needs. Alternatively, you can register below and download the planning tool immediately.

This content is for Budgeting and Forecasting and Business Plan Advanced members only.
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