Business forecasts prepared by clients can bear little resemblance to reality and leave the bank asking why the business hasn’t performed as expected, as WILL ABBOTT, of Randall and Payne, explains.
CHRIS Isaac, owner and creative director of the Isaac Partnership, describes his experience: “We were looking to expand and cash-flow was tight. To go to the bank and secure funding we needed to produce a set of accounts and a forecast.”
Start by building an income matrix: 1. How much income can each employee (or for a manufacturer, each machine) generate?
2. What is the salary cost of each employee?
3. How much can each product/income stream potentially deliver?
4. Which of the staff will be responsible for these income streams?
5. Income achieved by staff, per product, per month can then be used to create a detailed income matrix.
This provides a bank with more information and forms a skeleton around which monthly performance (under or over) can be monitored.
For more information on forecasting, contact Will Abbott or John Barker on 01242 776000.
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