![]() ![]() Running a business without Financial Forecasts, is like driving down a highway using your rear vision mirror for guidance! Why business owners need Financial Forecasts! Projected stock turns in line with what has been the case historically?. ![]() Debtor and creditor collection, and payment days, in line with what has occurred in the past?.Margins used in line with historic margins?.It puts your business into a language Bankers can understand!Īlso, because the Cashflow Forecast is linked to a projected Profit and Loss and Balance Sheet it allows the Bankers (& indeed the business owner) to confirm the validity of the assumptions used in the Forecasts. Three way Financial Forecasts provide Bankers insights as to the future outlook of the business from a financial perspective. Whilst they will have some understanding of your business and industry, their expertise lays in the area of numbers and finance. Why Banks need Three Way Financial Forecastsīankers are financiers. Unlike a stand-alone Cashflow Projection, they are less prone to error as the assumptions used can be more accurately tested against historical performance. Also how the business balance sheet is impacted. That is they show what the cashflow means in terms of margins and profits for business. Unlike a traditional stand-alone cashflow forecast – three way Financial Forecasts, link the projected cashflow to a Balance Sheet and Profit and Loss Statement. In the past, often a simple cashflow forecast would have been sufficient, however whilst a cashflow forecast can be helpful as a guide – its ability to provide Lenders with a comprehensive overview of the future financial outlook for a business is limited! What are Three Way Financial Forecasts? Increasingly when businesses look for funding from a Bank they will be asked to provide three way Financial Forecasts. ![]()
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