Predictions and projections are part of the role of a finance manager. Every year, you have to project where your business is headed to create department goals, benchmarks and strategy.
Use information to drive instinct
Instinct, based on experience, intelligence, logic and familiarity with your industry, is an essential quality in any financial manager, but there comes a point when you need information to guide or support instinct.
On a small scale, instinct may tell you, following the review of an invoice, that a vendor is taking advantage of you with their prices. However, in order to have a conversation with them, you need support in the form of information on any fluctuation in their pricing and the prices of other vendors.
In the same way, when it comes to plotting the financial goals of the business, it’s vital to have information on your side. If you capture the data for your operations automatically as you work by doing business in the cloud, you can easily discover patterns and trends in:
Having this information enables you to predict growth and guide department strategy based on past, combined information detailing trends in the behaviour of your customers, employees and vendors. You also have the advantage of seeing the consequences of that behaviour.
Whether it’s big plans for the future or the small moves which guide you there, if you want to perfect your financial projections, it’s essential to have information backing up what you suspect the company is capable of. Your department can then focus on the areas that will get you there.