For any business in any industry, forecasting is crucial to map out future growth, cash flow and financial status
It forms a key part of the wider planning process, enabling finance managers, IT professionals and business owners to chart an accurate course for business development and investment. This is crucial for any business looking to establish a profitable direction; though knowing exactly where to start can prove to be a headache for businesses without previous experience in this area.
Effective Excel forecasting requires both technical expertise and intuitive software that can be tailored to meet the needs of the organisation it is serving. Once these resources are in place, accurate data insights can then be used to inform strategic decisions and identify key growth areas within a business.
Common forecasting models
As the world’s most popular spreadsheet and workbook program, Excel is used by thousands of companies worldwide to analyse and forecast insights into their own operations and performance.
Let’s take a closer look at a few different ways in which Excel can serve an organisation’s forecasting needs:
All businesses rely on financial data to monitor their performance and rate of growth. Financial forecasting provides necessary insight into a company’s turnover and profit, allowing key stakeholders to see exactly how well the business is performing in certain areas.
Ambitious companies continually invest in the development of their primary products or services, which often means scoping out potential markets or avenues for expansion. Sales modelling can be used to gauge the level of financial investment involved with a new area of development and set realistic expectations for costs.
Excel affords businesses the ability to spot trends and patterns within the linear data available to them. As discussed in the next section, the program also offers plenty of options when it comes to sharing information among teams or as part of collaborative projects.
Visualising data in Excel
Excel allows users to mine data insights in a range of engaging and digestible ways. This is perfect for IT professionals who wish to consolidate important information so that it is easy to understand and ready to share with key stakeholders within a business.
The latest edition of Excel (2016) supports data visualisation through graphs, pie charts, sparklines, conditional formatting and 3D models. These interactive visualisations are the perfect solution for users looking to filter and present data quickly and effectively. Regular reports may also be automated using Excel’s in-built VBA programming language.
In-house vs. outsourcing
In an ideal world, every business would be able to employ a highly experienced data forecasting professional. Unfortunately this isn’t always a viable option, particularly for SMEs who may only be able to staff an IT manager to oversee all aspects of their digital strategy.
Forecasting in Excel is an integral part of business planning and it is therefore crucial to get the process right first time. A business may look to outsource their forecasting requirements to an experienced Excel consultancy as and when required. This ensures a high level of accuracy in categorisation and formatting at all times, as well as minimising the risk of acting on incorrect information further down the line.