Your nights have been a little bit longer, your bottle of aspirin a bit emptier than it was at the beginning of the month. Finally, the annual budget is done. Time to take a breather, right? But wait — the board just decided to change one of the strategies, and now they’re asking you to draw up a reforecast of what you just finished! Do you need to run out and grab a new bottle of ibuprofen? Maybe not. Questica understands the frustration of and wants to help make your time spent doing it as pain-free as possible.
Why have a budget reforecast?
If this is your first year entrenched in the wonderful world of budgeting, you may question why you need to reforecast at all. Well, there’s a lot of factors that go into making a budget alone, and you can’t always make the most accurate prediction. Often, the data you’re using is theoretical, or based on early projections and analysis. In other words, nothing concrete. A reforecast relies more on real-world data, and is a way to inform your company whether adjustments need to be made. Reforecasting can seem daunting at first, but here are some tips to make it easier for you.
Expect a reforecast to begin with — because you will need one
A really simple way to get off on the right foot is to start your budget with the understanding that a reforecast will happen. The market fluctuates too frequently for your company to go without one, and you need to keep your eye on the bigger picture throughout the year. Knowing what you need to do from the start can keep your head clear and help prevent you from feeling overwhelmed — leading to sound, confident decisions that are better for your business.
Don’t throw out your original budget!
Eventually, your business will have to compensate for something really drastic. It could be a weather emergency, a failed product, a recall, or even a market crash. In those times, you may be tempted to scrap your original budget and start from scratch, but don’t! Keep your original budget handy and report against it with your reforecast. If nothing else, it’s a good way to remind you of where you want your organization to be.
Plan for the best and worst case scenarios
It’s so easy to assume the worst, isn’t it? To have a successful company, you need to anticipate things going wrong. But it’s not always like that! Also make a plan for if things go well. Perhaps you underestimated the popularity of your new product, or maybe a large unexpected donation came through at your last fundraiser. If you reforecast for the best case scenarios, you give your organization an opportunity to press the advantage.
Continue to update, but don’t go overboard
This is another great tip for keeping yourself sane. It is important to update your budget continually to prevent oversight and keep everyone aware of where the year is heading. Don’t feel you need to rush to update at every small change, however. A reforecast is still a projection, an estimation. It’s not meant to be exact numbers, and unless the discrepancy between your projected numbers and the actual ones is abnormally large, you don’t need to stress yourself out accounting for every change. Keep an eye on it, and save the updates for the big stuff.
Organize early, and keep it that way
This one is probably a no-brainer. As with everything in the financial world, you need to keep things organized. Do it early, and keep it that way. You’ll thank yourself for it later when you’re needing to present for the budget meeting.
One additional way to help with organization is to have the right kind of software. Too often, traditional spreadsheets are inefficient and cumbersome. You’ll often find yourself struggling with the software more than actually making projections. Questica has the software to make your job easier, whether it be budgeting, forecasting or reforecasting. Check out our website to learn more about the services offered and request a demo to see our product in action.