Cash is King – Managing Better with Revenue Forecasting
It is a truism that in small business, “Cash is king!” Given that as a baseline, revenue forecasting, or forecasting in general, is crucial for your organization to accurately manage costs, understand what strategic initiatives are advisable, and understand when you can and should expand your team.
But predicting the future is hard. While it would be great to have a crystal ball when planning for your business, most of us will have to make do with “What-If” scenarios based on educated guesses and estimated probabilities. Forecasting this way with any sort of accuracy is painstaking, and often requires you to rerun reports and redo manual manipulation in Excel as soon as someone asks, “What if X happens?” This is both costly from a time perspective and prone to error because the more manual manipulation, the greater the chance that there will be a typo or fat finger error.
Fortunately, there’s a better way. At Kenway, we haven’t found a crystal ball (yet), but we’ve created what could be the next best thing: a dynamic revenue forecasting model in Power BI with built in “What-If” parameters.
Our new Revenue & Resource Insights and Optimization service uses your organization’s existing OpenAir data to project future revenue. You can then rapidly run scenario analysis by changing inputs such as additional projects, hours, bill rate and fixed fee revenue to help drive planning and see how forecasted revenue will shift up and down for each scenario. By instantly marrying the flexibility of an Excel “What-If” model with the up-to-date forecast data from OpenAir, you save both time and headache while getting a more nuanced view of your organization’s future state. That is all super important for cash management.
But wait, there is more …
Revenue forecasting has other benefits beyond ensuring your business has liquidity. It also has the added value of leading to a deeper analysis of your customers and products. If you are forecasting that a long-time client is going to grow significantly more than historical trends, that is worth additional analysis. Is your business growing with this client because they are growing, or are you getting better at identifying and delivering value? Similarly with your products, if the results of your analysis show that you are selling more product, do you know why? Can you accelerate even more? What are you doing well, and can that inform what you do more of and where you make future investments?
We at Kenway believe that unless you are leveraging your data to understand what is next, you are leaving out an important part of protecting and growing your business. Intrigued? If so, check out the Revenue and Resource Insights and Optimization solution on our website, or email email@example.com to learn more.