👋Hey there,
2 things before we jump in!
FIRST: check out our webinar on Fri, Mar 22nd, it’s all about analyzing customer counts.
The event is completely free, bring friends and register using the link below:
SECOND: Want to share your career FP&A wisdom with the FP&HEY community?
Send us an email (info@fpandhey.com), we’re looking for podcast guests🎙️
Now onto your regularly scheduled newsletter.
Are you consumed with the stressful process that is forecasting?
You are not alone…EVERYONE in FP&A feels forecasting stress in their FP&A career.
We’ve completed hundreds of forecasts in our FP&A careers (that’s no typo).
Hear how we ripped out wasteful time and got the process down to 2 business days.
All while preventing long nights and team burnout.
Listen on
Profit and Cash Forecasting Stress is Real
Owning or participating in a forecasting process is a right of passage in FP&A careers.
It takes:
Data chops (aka Excel skills)
Organizational skills (aka team and process management)
Continuous improvement to survive (aka don’t just throw hours at the process)
Let’s dive in to learn how you can improve your forecast process.
🔥TIP: Read “How to Profit Forecast Without a Crystal Ball” for more insights
Show Notes
00:40 - We turned around a profit forecast in 2 days (for real)
01:30 - What a first-time forecaster in a F100 FMP program looks like
03:59 - Efficient profit forecasts take into account data, people, and process
04:55 - Don’t let too many people edit the forecast—sh#t gets confusing
05:29 - Use your accounts to assign ownership of spending drivers
06:48 - Marketing spend is the Wild West, but it can be tamed
08:09 - Having a globally distributed team is a BIG advantage to save time
09:35 - Give people the roadmap of the forecast process, it’s empowering
11:15 - Ask “why” you do things will help remove wasteful time
12:45 - Mind mapping is INSANELY useful to visualize a profit forecast process
14:25 - Ultimately the stakeholder is your CFO and CEO, help them help you
15:35 - Conclusion—how to shorten the time it takes to forecast
What is a Profit and Cash Forecast?
Is your business going to achieve its revenue, profit, and cash goals?
The only way to know is by doing a monthly (or quarterly) profit and cash forecast.
It’s the process of adding up all your financial results.
And figuring out where your financial results will likely land in the future.
🔥TIP: Learn how to set your company’s KPIs and metrics
Why Does a Profit and Cash Forecast Matter?
Making business decisions is tough when you have no idea how much money your company will make.
Is revenue and profit going to be higher than expected next quarter?
If yes, what can you do with the surplus of cash?
FP&A is front and center helping businesses make timely investment decisions.
Ways to Reduce the Time It Takes to Forecast
A forecast is super stressful because it can take weeks to complete.
It can have way too many cooks in the kitchen.
And requires too many people to get relevant info.
Do these three things to reduce your profit forecast time (and stress levels):
Do NOT let dozens of people input forecast assumptions directly in your forecasting system—keep it to your FP&A team only
Minimize the number of department owners you work with to review forecast assumptions
Assign an FP&A team member to each major account group (like people costs, marketing)
This will help you become a faster forecaster and a standout finance business partner.
Read our articles below to help you crush business partnering:
How to impress executives with quarterly sales performance reviews
How to use bubble charts as the ultimate customer renewals tool
Conclusion: You Just Leveled-up Your Forecast Game
You can make your right-of-passage forecasting role way better.
And reduce the time it takes to do it.
By improving the process, assigning ownership, and simplifying things.
You got this forecasting thing.
As always, let us know if you have any suggestions or ideas you want us to cover by replying to this. We read and reply to every email.
Now go have fun making an impact on your business and your career!
See you next week 👊
Cheers,
Drew & Yarty
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Disclaimer: This content is not investment advice or financial advice. The views expressed and stories told are our own. We may be investors in the companies discussed. Do your due diligence when considering applying what you learn.
How Your FP&A Team Can Forecast in 2 Days