Financial Forecasting
Financial forecasting done properly, the FDPack way.
The unique FDPack forecasting methodology works with a high level of detail and double entry discipline to ensure we do the job “properly”. Detailed, accurate and integrated.
What do we mean by
“financial forecasts done properly”?
Actual accounting statements are prepared with the discipline imposed by the double entry debit and credit system which means that, for example, you can’t record a sale into the P&L account (a credit) without also recognising that there is also a debit side to the transaction being either an invoice issued to a debtor or a cash receipt.
Profit & Loss
Cashflow
Balance Sheet
Thank you for helping us to get our figures together. I can now sleep better at night.
William Moore, CEO of AirBox Systems
How we Forecast
When it comes to forecasting anyone can create a profit & loss on a spreadsheet by simply listing revenue and expenses, but a P&L on its own will only tell part of the story.
For example, will the business have the finance it requires to deliver the predicted level of activity and what does the balance sheet look like at the beginning and end of the forecast period?
Financial modelling and rolling forecasts
The unique FDPack forecasting methodology works with a high level of detail and double entry discipline to ensure we do the job “properly”. Our model is built with the following structure:
Drill down into the detail
Having separated the forecast into different transaction types and attached the appropriate accounting codes, our FDPack software is then able to create all the double entry transactions that describe the forecast or budget.
This creates a single database containing, actual, forecast and budget transactions all in the same double entry format, meaning that they can be easily analysed and presented in whatever combination is required.
If you drill down into any line of the forecast, you will see transaction level detail and not just a single figure, which is the assumed opening/closing balance movement used by some short cut forecasting methods.
Save Time with Smart Reporting
Like all jobs that are done properly, our FDPack methodology is initially more demanding and time consuming but has significant long-term benefits for the accuracy and reliability of the forecasts and budgets.
Applying these disciplines to forecasting and budgeting ensures that the three financial statements are integrated and reassures stakeholders that the business really understands the mechanics of its finances and its cash flow.
“The FDPack modelling technique is like renovating a classic car. At one point the parts are all over the garage floor but, by the time you have cleaned them up and put them back together again, you have an intimate knowledge of how the car works. Like any classic car it also needs continual attention to keep it running smoothly”
Simon Phippen, FDPack Consultant.
Blogs
Useful content to simplify and demystify a range of financial subjects
The Future of SME Finance: Why Financial Software Alone Is No Longer Enough
Software has improved financial reporting significantly. But many growing SMEs still struggle with: The issue is rarely a lack of software. It is that software alone cannot create financial clarity without the right structure, interpretation, and expertise behind it. The future of SME finance is not human expertise versus technology. It is expert-led financial systems…
When Financial Dashboards Look Smart but the Numbers Still Don’t Work
One of the risks with modern financial reporting is that unclear financial information can still look highly convincing. Dashboards improve presentation. But presentation is not the same as financial clarity. A business can have: while still struggling to explain: The issue is usually not the dashboard itself. It is that the underlying financial information is…
Financial Drag: How to Audit Your Reporting for Maximum SME Agility
A finance audit for reporting drag is a systematic process of identifying and removing redundant data, overly complex structures, and reactive processes within a company’s financial function. By stripping the accounting engine down to its essential drivers and implementing a 3-way integrated system, an SME can move from “post-mortem” reporting to a state of constant,…
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