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News - 4 January 2013

2013 A New Year, a New Opportunity OR Budget or not to Budget, that is the question?

You’ve all heard the phrase, “He who fails to plan, plans to fail.”

In view of this I thought I would ask Lavinia Newman, founder of ABDS, about the need to complete a Budget and Forecast Plan.

Why do you need to prepare a Budget and Forecast plan?

LN: “Often, Budget and Forecast plans are done as a last minute activity, under duress and often under time constraints. But, as we at ABDS tell our clients, the more time and thought you put into them, the better quality they will be and therefore the greater your ability to monitor, asses and drive your business forward.”

What questions should you be asking?

LN: “I would ask the following ……..

  • Are you confident your budgets and forecasts provide the comprehensive insights you need in order to take optimal investment decisions?
  • Can you compare like for like with previous years?
  • Can you compare and analyse forecast against actual and therefore identify potential opportunities or problems?
  • Do your internal accounting staff have the knowledge, experience and ability to prepare the information?

Are they purely internal documents?

LN: “Definitely not. Good forward planning of budgets and forecasts are essential when looking for future investment. They reassure potential investors that your procedures and processes are in place and that you have actually thought about what you want and how you can achieve your goal.”

Aren’t they just a chore to be completed then ignored?

LN: “Definitely not. They are working documents, and are of major value when you consider that the UK is emerging from a major recession. Competition has never been fiercer; the need to achieve maximum value from your own resources has never been more significant; and the awareness of your own situation concerning cash flow, debtor days and raw material costs should be of paramount importance.’

Thank you Lavinia, and finally, can you sum up please how we at ABDS can help.

LN: “Certainly. Not only can we use our experience and knowledge in conducting the initial planning and forecasting we can also assist with the monitoring of results on an ongoing basis. It is only by regularly reviewing performance and reforecasting that your business decisions can be made with confidence. Please contact us to discuss the role ABDS can play in the future of your company.”

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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