Budgeting & Forecasting: Tips & Strategies for 2024
With the continued pressures of high interest rates, inflation, market competition, and a potentially looming recession, developing a reliable and accurate budgeting and forecasting process becomes even more important.
As experts in helping organizations future-proof their budgeting and forecasting procedures, we’ve outlined some essential tips and strategies for budgeting and forecasting during periods of economic uncertainty to help you strategically tackle all 2024 has in store.
Tips & Strategies for Budgeting & Forecasting During Periods of Economic Uncertainty
- Rework cash flow management and forecasting processes to drive reliable budget creation
- Conduct scenario planning to get ahead of budgeting and forecasting issues before they arise
- Implement modern technology for FP&A and reporting to guide the success of a flexible budget
- Identify areas to cut down on overhead spend to bolster current and future budgets
- Consider hiring interim support for strategic budgeting and forecasting guidance
- Turn to a trusted financial partner to future-proof budgeting and forecasting
Rework cash flow management and forecasting processes to drive reliable budget creation
During periods of economic uncertainty, it’s essential to focus on reworking cash flow management and forecasting processes to account for market changes like inflation, strategically identify potential bottlenecks, and implement measures to mitigate their effects.
Strong cash flow management and forecasting also helps to ensure that an adequate cash reserve can be maintained in the event that unexpected costs accrue or revenue disruptions occur – which, in today’s world, is becoming more of a frequent occurrence.
Conduct scenario planning to get ahead of budgeting and forecasting issues before they arise
Conducting scenario planning begins with identifying potential scenarios based on market outcomes, economic disruptions, and other risks. For example, what will an organization do to make up for a decrease in capital if their suppliers increase prices or investors pull funding?
Whatever the scenario may be, proper planning and understanding of potential outcomes provides organizations with the ability to strategically assess negative impacts on revenue and cash flow and utilize these findings to develop a more flexible budget.
The exact scenarios that need to be taken into consideration will depend largely on an organization’s unique position, needs, and goals. For some expert insights, tips, and best practices, head to our blog: Why Long-range Financial Planning is Key in a Tight Financial Market.
Implement modern technology for FP&A and reporting to guide the success of a flexible budget
Implementing better technology for FP&A and reporting or optimizing the current configuration can empower organizations to get more value out of their data, save time via process automation, and seamlessly leverage historical financial information to create an accurate and data-backed budget.
Especially during periods of economic unrest, overall growth decisions need to be made quickly to ensure the right opportunities can be capitalized on.
Utilizing modern dashboarding and reporting tools like PowerBI is essential for gaining more visibility intro and control over the finance function, providing organizations with the ability to establish a faster and more reliable budgeting and forecasting process.
Identify areas to cut down on overhead spend to bolster current and future budgets
When attempting to build a budget in an uncertain economic environment, it is essential to conduct a detailed analysis of the current cost structure to identify potential areas to free up cash flow – and do so without interrupting current operations.
This process involves reviewing and categorizing current expenses, identifying cost drivers, and comparing this information to industry benchmarks to identify areas where costs might be higher than normal.
Next, the organization can use these findings to identify and explore certain cost-reduction strategies for each category (ex: contract renegotiation or process automation) and strategically eliminate unneeded expenses.
Consider hiring interim support for strategic budgeting and forecasting guidance
In today’s ever-evolving economic environment, hiring constraints are all too common.
Turning to interim support versus hiring a full-time employee provides a flexible solution to growth and scale by attributing resources to where they’re most needed for growth and ensuring key project milestones can be quickly and effectively met.
Plus, interim financial management also provides a seamless transfer of knowledge after the project is completed, as all processes will be expertly documented to ensure business continuity.
Turn to a trusted financial partner to future-proof budgeting and forecasting
In a tight financial landscape, establishing reliable budgeting and forecasting procedures while attempting to navigate ever-changing market ongoings can be difficult to maneuver without the right expertise.
Whether a company needs support to establish scalable growth strategies, rework reporting and forecasting to account for inflation, or implement new technology to increase visibility and control, turning to a trusted financial consultant for guidance can allow organizations to cultivate the true story behind the numbers, build a reliable and more accurate budget, and move forward into 2024 with full confidence.
Final Thoughts on Budgeting & Forecasting During Periods of Economic Uncertainty
Creating a flexible budget and integrating reliable forecasting processes will become even more critical as organizations work to navigate today’s growth constraints. For best results, consider turning to a trusted partner for help.
From providing the day-to-day support you need to future-proof budgeting and forecasting procedures to identifying cost-management strategies that help you overcome growth hurdles, our proactive, project-based approach is specifically designed to your businesses efficiently execute key initiatives that bolster financial health and provide you with more room to focus on overall goal setting and actualization.