A forecast isn't just for year-end

As the dust settles at the start of the year, it's a good time to revisit your financial plans and make sure they're not gathering dust themselves.

While many businesses dive into cash flow forecasting and budgeting with gusto during annual planning, it's too easy for those plans to fade into the background as the months tick by.

The effort you poured into setting budgets and building forecasts at the end of last year shouldn't stop there; it's just the beginning. While those big-picture plans provide essential direction, the unexpected twists and turns of the next 12 months mean static forecasts can quickly become outdated. Adopting a year-round approach to cash flow forecasting can keep your business agile, resilient, and ready for anything.

To help you put this into practice, we've gathered insights from finance experts in Fathom’s community and leading industry reports. From maintaining financial visibility to using the right tools, here are the best ways to keep your forecasting proactive, strategic, and impactful all year.

The power of regular reviews

The past few years have shown us how quickly circumstances can change. A study by ACCA and KPMG found that 70% of finance professionals believe agile planning improves a company's resilience by enabling faster adjustments to unexpected events. Businesses that embraced regular forecasting stayed afloat during turbulent times and gained sharper insights and better control of their finances.

Best practice: Make quarterly reviews part of your routine. These aren't just check-ins. They're opportunities to adapt, realign, and stay in control of your business's financial future. We recommend planning ahead of time and boxing off time in your calendar to perform these.

Keeping forecasts aligned with strategy

We know cash flow forecasting goes beyond tracking numbers; it is a tool to keep your business goals front and centre. Many organisations start the year with purpose-driven budgets, but losing sight of those priorities over time is easy.

Deloitte reports that 61% of successful businesses use forecasting to realign with their strategic goals continuously. Making this a quarterly practice keeps the process grounded and relevant, helping you identify areas that need reallocation or rethinking. To help guide these conversations, here's a checklist of questions you can ask during each quarterly review:

• Are our current goals still relevant?
• What are our key priorities for the next quarter?
• How does our current financial position support these goals?
• Are there areas where resources can be reallocated to align more closely with strategic priorities?
• Are we on track to achieve our purpose-driven goals?
• What obstacles or risks do we foresee?
• What new insights have we gained that could refine our strategy?

To keep your forecast realistic and actionable, you should incorporate any new trends, customer feedback, or operational data.

Cash flow, not just profitability

While profitability often gets the spotlight, cash flow is just as critical. Sadie Channing, Director at Menzies LLP, emphasizes that profit doesn't equal cash, and neglecting cash flow forecasting can leave businesses blindsided by unexpected expenses.  

"Businesses are quite good at thinking, 'Okay, what do we think our profitability will be next year or the year after?'. And that's all well and good. But how does that turn into cash? Profit doesn't equal cash, in fact, far from it a lot of the time."

Incorporating scenario planning into your reviews can further preparedness. ACCA's research shows that 53% of finance leaders consider scenario planning essential for managing risks. Testing your forecasts against potential challenges, such as increased costs or a drop in revenue, ensures you're ready to navigate any surprises.

Best practice: Include best and worst-case scenarios in your forecasts. This approach makes managing risk, planning for growth, and identifying strategies for weathering unforeseen financial pressures easier.

The role of visual tools

Numbers in your plans are essential, but spreadsheets alone can be overwhelming and often cause the dreaded “glazed-over look" from clients or non-financial stakeholders. Alicia Williams, Director at SHORTS, highlights how visual tools make forecasting accessible, especially for business owners who might not be finance experts. Visual insights allow you to spot trends, compare scenarios, and understand cash flow health at a glance.

"Many businesses we work with are amazing at what they do, but they're not accountants. Numbers don't mean a great deal to them, and they don't have hours to spend trying to figure them out. Having visuals is vital because it helps them quickly spot trends—if something looks fine in a spreadsheet but you see a downward trend on a graph, you instantly know something needs attention."  

Best practice: Investing in tools that offer visual insights can make financial discussions straightforward, collaborative, and actionable.

From risk to opportunity

Quarterly forecasting isn't just about preparing for risks and recognising potential growth. For many business owners, regular cash flow tracking opens strategic possibilities, from hiring staff to pursuing ambitious projects. Knowing your forecast isn't limited to static projections empowers you to take calculated risks confidently, whether expanding your team or investing in new tools.

This practice is becoming increasingly common: Deloitte's findings show that organisations using rolling forecasts are 75% more likely to identify growth opportunities than those using static, year-end budgets. In this way, regular forecasting becomes a tool for resilience and innovation.

Best practice: Use quarterly reviews to assess new opportunities as they arise. With consistent insights into cash flow, your business can confidently pursue growth, knowing you have the financial stability to support it.

Forecasting as a year-round tool

Successful businesses treat forecasting as a dynamic, ongoing process. Instead of letting your plans fade after the rush of annual planning, commit to regular reviews to stay agile, aligned, and ready for growth. By approaching forecasting as a year-round practice, you'll be prepared to navigate challenges, seize opportunities, and support your long-term goals at every stage of the year.

If you're looking for a tool that simplifies this process, Fathom offers features that make forecasting and scenario planning accessible, collaborative, and visually engaging. Whether stress-testing scenarios, realigning budgets, or exploring new growth opportunities, Fathom helps you keep your financial plans actionable and aligned with financial goals.

Because a great forecast isn't just for December, it's a roadmap to year-long success.  Start your 14 day free trial with Fathom today.

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