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Budgeting and Financial Forecasting Services

Budgeting and financial forecasting are fundamental activities of every successful business that help you make better financial decisions and stay focused on your strategic and long-term business goals. While financial forecasting paints the big picture of what your business wants to achieve and the different factors involved, budgeting is a step-by-step financial plan showing revenue expectations and expenses over a specific period.

 

    • A budget shows expected and/or planned business expenses and revenue over a specific period whereas financial forecasting is a well-thought-out projection of business outcomes in the future.

    • A budget is aimed for the short-term period whereas a financial forecast is usually prepared for a long-term period.

    • Compared to a financial forecast, a budget is more static. Financial forecasts undergo several changes and adjustments as the business situation, and economic conditions change.

Budget Preparation Services

We can assist you in the preparation of the budget outlining projected revenue from and expenses for the operations as well as a projected cash flow over a specific period (e.g. for month, quarter and year). Depending on your business model, we will use one of the following widely-used techniques to develop a budget which works best for you:

 

    • Incremental budgeting: It takes the previous year’s actual figures and adds or subtracts a percentage to build the current year’s budget. It is the most common type of budgeting technique because it is simple and easy to understand. Incremental budgeting is appropriate to use if the main cost drivers do not change from year to year.

    • Activity-based budgeting:It is a top-down type of budget that determines the amount of inputs required to support the target set by the business. Activity-based budgeting requires the determination of the activities that need to be undertaken to meet the specific target and then allocating costs for conducting these activities.

    • Zero-based budgeting:It starts with the assumption that all budget items are zero and need to be reconstructed from the scratch. Zero-based budgeting is very tight, aiming to avoid any and all expenditures that are not considered absolutely essential to the successful (profitable) operation of your business. Therefore, it is effective to use when there is an urgent need for cost containment, for example, in a situation where a company is going through a financial restructuring or a major economic or market downturn that requires it to reduce the budget dramatically.

    • Value proposition budgeting:It is a mindset technique to ensure that everything included in the budget delivers value for your business and therefore, aims to avoid unnecessary expenditures.

 

Proper and accurate budgeting can deliver many benefits to your business including but limited to:

    • Efficient monitoring of performance and progress
    • Improved focus on the business based on numerical data and facts
    • Developing realistic targets for the growth of the business
    • Efficient management of cash flow to avoid emergencies
    • Appropriate allocation of financial resources
    • Troubleshooting financing problems well before they arise

Financial Forecasting Services

We can also assist you in financial forecasting the financial future of your business by examining its historical performance data (such as revenue, expenses, and cash flow) and by considering factors and assumptions that can influence future business performance. A widely recognized example of financial forecasting is using pro forma financial statements that focus on a business’s future reports, which are dependent on assumptions made during their preparation⁠, such as expected market conditions.

 

The term “pro forma” refers to projections or forecasts and apply to any financial document, including:

 

    • Balance sheets
    • Income statements
    • Cash flow statements

 

Similar to the budget, a professionally developed financial forecast will deliver many benefits to your business including but limited to:

 

    • Assisting in creating a long-term financial plan and goal-setting
    • Ability to identify larger patterns and relationships
    • Faster response to cyclical or seasonal changes
    • Setting and enforcing effective budgets
    • Creating competitive advantage for the business

How we can add value to your business

By hiring us to assist you in developing the budget and financial forecast, you will acquire not only professional advisors but also a business partner comprising a highly skilled and experienced team of experts who are customer-friendly and caring about the growth and success of your business.

 

Our budgeting and financial forecasting services will bring the following additional values to your business:

 

    • Break-even analysis: By constructing an accurate budget and financial forecast, we will provide you with the break-even analysis to evaluate when your new business, products and/or service will become profitable.

    • Robust financial prediction: Using our rich experience and solid expertise in budgeting and financial forecasting, we will help you predict the financial future of your business and create a robust long-term financial plan.

    • Focus on business: We will help you in creating a focus for the direction of your business and providing targets that will help your business grow. This will also give you the opportunity to stand back and review your performance and the factors affecting your business.

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