Keep business finance forecasts up to date
Why and how you should assess and maintain your budgets and business plans on a regular basis.
Keeping an accurate and up-to-date budget or business plan will help you manage your cashflow, by allowing you to:
- record actual figures
- compare actual figures with the budget or plan
- record any inconsistencies and investigate the reasons for them - eg a one-off, seasonal demands, changes in the economy or problems in your business that could be improved
- review whether the budget or plan should be updated
You should also consider completely new factors such as an unexpectedly large order or the arrival of a new competitor on the market, and whether these changes need to be incorporated into your business plan or budget. You might choose to:
- Keep the original budget - but measure and understand any variances in the actual figures against the original budget and new forecasts.
- Use rolling budget/forecasts - as each month's actual information is finalised, update the budget to provide an additional month's data. This means that you will always have a 12-month projection.
Whatever system you use, it is important to keep your eye on the forecasts and keep them up to date. See business budgeting.
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