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Rethinking Financial Forecasting in NetSuite

Have you ever wondered if whether you could speed up your financial forecasting without losing accuracy?

I’ve seen clients spend between 1 and 10 days of each and every month getting their financial forecasts ready.

The largest block of time seems to be spent slicing and dicing the forecast data to fit the reporting format accepted for presenting historical financials.

Financial Forecasting can take different forms, but the end outcome for everyone is to create a view of what the firm’s financial future might look like in 12, 24 or 36 months on the basis that we keep doing what we’re doing. We do this to support management or our stakeholders’ decision-making capabilities.

The financial forecasts are usually prepared using the same methodology (export data from ERP, and apply a growth factor for the future period, accommodating for exceptions and so on), and these are usually done on a regular and consistent basis (monthly, quarterly or yearly).

In the scenario above, clients try to support the process by procuring add-on solutions to their ERP solution, but for the smaller business, these often cost more than their basic NetSuite license.

When it comes to automation, the accepted rule of thumb is that those processes that are done ‘regularly and consistently’ have the greatest potential for efficiency gain, and Netsuite offers tremendous power to transform this situation.

We have another way of looking at it: rather than follow a manual process of exporting our historical financials into excel and manipulating them for future outlook why not simply create future dated transactions based on our historical information with a growth factor applied (dynamic or fixed) automatically every month, on the same day or as you like?

You can even manually insert known future events into the forecast; such as buying a new truck, taking in new capital, repaying a balloon debt, or removing one-off historical transactions so that they don’t corrupt the forecast future. With this, you can then simply run your normal financial statements (with full dimension/classification integrity) and normal financial KPI’s for ‘the next 24 months’, before distributing them to management and stakeholders alike. What was a day or a week’s worth of effort now only takes an hour or two.

Sounds like a smarter way to tackle the problem me…that why we build RazorCashflow.

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