Budgeting and Forecasting
Budgeting and Forecasting requires a team effort to be meaningful. Sales team needs to develop budgets based on specifics, such as expectations of customers and prospects, competition, product mix and regulatory impact. Each department, needs to budget their costs, identifying fixed and variable components.
Finance can then compile and present the budget to the executives. If done properly, changing the budget to reflect different forecasts will simply require entering different revenues. The models need to project Profit and Loss, a Balance Sheet and show the working capital required to fund operations.
Accountability for the budgets is essential. This requires actual vs. budget analysis. A good system will streamline this process.