Articles & Alerts
What You Need to Know About Financial Planning and Analysis: Part 4 – Forecasting and Modeling
This is the fourth alert in our Financial Planning and Analysis (FP&A) series – Catch up with Part 1: Planning and Budgeting, Part 2: Integrated Financial Planning, and Part 3: Performance Reporting and Management to understand the extensive benefits that proper FP&A can offer to your organization.
Forecasting and modeling are vital in shaping an organization’s strategic decisions, allowing for the navigation of future challenges and capitalization on opportunities. Just as an accountant meticulously assesses a company’s past financial performance, FP&A professionals delve into data to steer the company’s trajectory forward.
The primary objective of FP&A is to equip executives with the insights needed to make informed, confident choices that align with both short-term objectives and long-term visions. Forecasting, a cornerstone of this process, is predictive and involves analyzing historical data to accurately anticipate future trends and outcomes. With modeling, FP&A professionals can use their analysis to project future scenarios. Company-specific data and industry trends can be leveraged to help provide valuable insights into strategies like expansion initiatives and infrastructure investments such as strategic hiring decisions. With the data gained from forecasting and modeling, executives can choose the best course of action to handle personnel changes, budgeting, and other factors that might lead to various outcomes.
As businesses continue to evolve in dynamic environments, the significance of forecasting and modeling in shaping strategic outcomes cannot be overstated. Embracing these tools empowers organizations to not only anticipate future challenges, but also to proactively position themselves for success in an ever-changing marketplace.
Anchin’s Client Accounting Advisory Services (CAS) team is not just your traditional accountant; the CAS group is forward-thinking and works with businesses to achieve their goals. To learn more about the forecasting and modeling process or how Anchin can help your business with FP&A services, please contact Anthony Carrella, Partner and Leader of Anchin’s CAS Group, or your Anchin Relationship Partner.
