As many of us have found out in the last years, there is a lot of uncertainty in the world. This applies to business too. It is important to have a trusted firm to handle your financial forecasting. Someone who knows the most up to date technologies and is looking to see what is coming. Having a pulse on the rhythm of the future could mean the difference between success and failure. The saying goes; “if you’re not growing, you’re dying”. You need to know where you have been, where you are now, and where you want to be in the future. That can seem like a lot to handle given that you also must run a business. But it can be done. Ludwigs can take the stress out of worrying about the future financial stability of your company and give you an honest look at where your company is headed. Financial forecasting is multi-faceted. There are three types: Cash Flow forecasting, budget forecasting, and income forecasting.
Cash Flow forecasting is the first type of forecasting, it estimates how cash will come in and out during a specific time. It is better in the short term because it only looks at the immediate need for money in certain areas. But in the long term it is not as accurate because the amount of cash coming in and going out is going to change with time.
Budget forecasting is the next type of forecasting, this creates conjecture about how the company will perform. This type also dives into what results your budget will produce. This is all predicated on having an honest budget and the ability to predict future trends.
Income forecasting is the final type of forecasting, this requires examining the past and present of the business’s broadening income. Business investors and other suppliers use this information to decide what kind of credit line they are willing to extend.
All these types of forecasting represent the importance of looking back, watching where you are, and projecting out what the future might hold. You need a firm that can handle all aspects of your financial success. That is why fractional accounting firms like Ludwig are so important.
