“Unlike other businesses, when we run out of money we have to shut down our operations. We cannot borrow to continue operations.”  This is how a senior executive from one of our not-for-profit customers introduced me to this marketing segment.  I could instantly relate to the importance of budgeting and forecasting in this business segment.  While there are different methods and techniques of projecting line items for future revenues and expenses, most organizations either use Annual or Rolling forecasts.

Forecasting is usually done on a monthly or quarterly basis. PowerPlan’s budgeting and forecasting solution has several built in projection methods to assist you in estimating future revenues and expenses.  These options go from simply inputting your best estimate in future periods to using historical data and economic drivers. You can also create different scenarios from pessimistic to optimistic and use this data for forecasting.  Predicting the future is never an exact science, but our objective is to provide you with necessary data and various tools to help you do smarter forecasting.  Some of PowerPlan’s tools include copying data for future months from another scenario, assuming the YTD average, using a basis account or economic drivers, or utilizing the current run rate.

Personnel costs in most organizations constitute a large percentage of the operating budgets. PowerPlan’s detailed position level budgeting allows the users to accurately project future costs in this area.  During the height of the difficult economic period (2008-2009 timeframe), one of PowerPlan’s public sector customers ran personnel projections over 5 future years each month and reviewed the outcome in the monthly management meetings.

Entrepreneurs may opt to sketch out their forecasts on yellow pads, but they certainly know that they cannot stay in business without forecasting in this highly competitive market.  Matured organizations, large or small, have more resources and in order to stay ahead must use the right tools for their forecasting needs.

Contact PowerPlan to see how we can help you achieve your objectives.