Now that the world has started to adjust to constant upheaval and chaos, it’s hard to forecast what progress will look like in a post-COVID world. The pandemic has completely reshaped social, professional, and personal norms.
In this new workplace, the world is starting to come back to life. As vaccination rates rise, people are starting to resume activities and social lives that are more reminiscent of their post-COVID lives.
However, nothing will go back to exactly the way it was. Most organizations are trying to figure out how to make progress and scale efficiently in a post-COVID world.
Predicting what financial, global, and professional norms will be like in twelve months is a great way to feel more confident about the future. How can you do that? Through financial forecasting.
How Forecasting Works
Forecasting is a combination of planning, predicting opportunity, and process. To properly forecast, it’s crucial to ask the following question: what happened in the past, and are the factors that caused past behavior still present? Some people say that past behavior is the best indicator of future behavior, which is often true.
The next step is assessing your best estimates of what the future will look like. For instance, you might be sinking a lot of money into an ad campaign. With the right data at your disposal, you can estimate how many more newsletter subscribers, for instance, will have access to your content by this time next month.
Evaluating your processes—how they leverage opportunity and alter past behavior patterns—is the heart of forecasting.
How Financial Forecasting Adds Value to Organizations
Financial forecasting creates predictions that involve estimated income versus estimated expenses. These predictions involve internal/external economic conditions, social and political factors, and customer behavior estimations. In short, all the factors that could reasonably be expected to financially impact the organization are included.
To do this, organizations must understand their industry and the impact they are making in it. They also need an exhaustive understanding of their customers to be able to predict their want vs. need buying behavior.
Here are some of the questions that are crucial to ask when engaging with financial forecasting.
How will the market change and grow in the foreseeable future?
This question involves social, political, financial, macroeconomic factors, and the ability to reasonably anticipate how competitors may react to these factors.
How will customer behavior change?
You gain and lose customers each year. You may get lots of new customers, but not many repeat customers. This is especially important if your goods and services are mostly in seasonal demand, which can allow you to leverage your predictions of the future.
What resources are required?
Growth—which is, on some level, exactly what financial forecasting is measuring—requires resources. This can include time, money, knowledge, and more.
How Financial Forecasting Plays Hand-in-Hand with Data Visualization
When it comes to taking action on your financial forecast, you need to be able to visualize the raw data that you’re getting. This helps in a few different ways:
- Identify patterns earlier. When assembling data into a visual format, it’s easier to see where patterns are forming and repeating themselves. With pie charts, heat maps, and more, you can see where customer behavior and success/disasters are repeating themselves.
- Stop the bleeding. When the patient is hemorrhaging, time is of the essence. The same is true when mistakes are being made, or there’s a crisis in your organization. You need to be able to respond quickly, and it’s much easier to make snap decisions when you’re well informed.
- Enhanced collaboration. Everyone is affected by the financial future of the company. How everyone interacts with data, from sales representatives to content writers to customer service reps, is a little different. But everyone needs data. When it’s visualized well, this gives employees a great opportunity to share it, which helps empower decisions.
How Do I Do It?
Our consulting experts can deliver seamless business solutions, no matter what type of financial forecasting you need. From marketing strategies to business growth to customer satisfaction, we can help your organization find its place in a post-COVID world.
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