Accountant's Minute 278
Predictive Accounting - 3 Way Forecasting Adds Real Value
The process of the preparation of a three-way financial forecast, which is known as “Predictive Accounting”, adds real value to the input that an accountant can make to a client’s business.
The recording of past events is the “writing of history”. What is more important for the client is for them to be able to view a “financial picture” of what their business will look like, if they are able to implement the strategies contained within their Business Plan in one, two, three years’ time.
This is “real accounting work” which will be highly appreciated by clients, once they appreciate that your accounting firm is able to prepare realistic financial models of what will happen in the future, if the leadership team is able to organise the business activities along the lines summarised within the Business Plan.
In some cases, the financial plan will require some re-examination of strategies and concepts because the financing of those activities is beyond the business’ financial capabilities. That’s okay, that’s why forecasts are being prepared so that the leadership team has an insight into what the financial picture of the business will look like, once these activities have been undertaken.
For arguments sake, to develop a new product may require the business to invest enormous amounts of money into new plant and equipment or into inventory holdings or the window of opportunity to sell the new product is only for a couple of months in the year and this may mean that the investment in inventory is shown to be extremely high and this may cause the leadership team to re-evaluate what they’re proposing to do.
The utilisation of Predictive Accounting enables the leadership team and the directors to reconsider decisions that they have already made, because when it is all committed to the financial forecasts contained within Budgets, Cashflow Forecasts and Projected Balance Sheets, the end result may not be acceptable to the business.
Predictive Accounting rejects the old concept of preparing a Budget, which was to take the previous year’s financial figures and add a CPI type percentage to the results. This approach does not take into account any of the external factors that can seriously affect the financial picture for the business.
ESS BIZTOOLS has agreed to participate in a joint-venture with PlanGuru, a USA company (with operations in 55 countries) that has developed an outstanding software product for the preparation of Budgets, Cashflow Forecasts and Projected Balance Sheets and Beyond Accounting Technologies Pty Ltd, a company headed by Paul Barnaby a very experienced chartered accountant.
PlanGuru will be offering their award winning software package, which can be utilised by an accounting firm with a maximum of 10 clients, as part of the normal fee (this is normally 3 clients).
Beyond Accounting Technologies will be supplying training and support services to the firms that subscribe to the special package with three interactive sessions over a three month period and ongoing support.
ESS BIZTOOLS will supply key driver templates to assist in the preparation of Budgets, Cashflow Forecast and Projected Balance Sheets, as well as other articles relating to the budgetary process that subscribers will be able to use.
Recently a joint webinar was presented featuring Tripp Graham, Marketing Director, PlanGuru, USA, Paul Barnaby, Australasian Representatives of PlanGuru/Managing Director, Beyond Accounting Technologies and Peter Towers, Managing Director, ESS BIZTOOLS. You can view that video recording by clicking here.
You are invited to participate in a free webinar – Predictive Accounting on Friday, 9th July 2021 at 12-noon AEST. To register click here.
During July and August 2021, ESS BIZTOOLS together with some of our Affiliates will be presenting a free weekly webinar on an aspect of the delivery of Business Advisory Services to SMEs.
This will give your accounting, business advisory and bookkeeping firms, that have made a decision to proceed with the introduction of Business Advisory Services for your clients, an understanding of the products, services and mentoring support that ESS BIZTOOLS is able to offer to you.
The first webinar in this weekly webinar series is being presented on Wednesday 7th July 2021 at 12-noon AEST - “Business Advisory Services Implementation Training - Getting Ready”. To register click here.
The keynote presenter in this webinar is Andrew Geddes, Accounting Industry Mentor and Coach and, for 10 years, Chair of Greencross Ltd, a company that he assisted in its creation 30 years ago and it scaled up to be a Top 200 ASX company. This was a great example of implementing Business Advisory Services with a client!
In this webinar we will identify how accountants can “get ready” to deliver Business Advisory Services including:
and more ideas as to how your firm can be ready to deliver Business Advisory Services with a wide range of products, ongoing support & training and mentoring support.
50% Off Sale!
Get the Business Advisory Services (BAS) Starter Package for only $999 – save $1,100 – sale ends 30th July 2021.
This is your opportunity to get a low-cost entry into Business Advisory Services for less than $1,000.
Upfront discount price $999 (incl GST) for the 12 months
$197 (incl GST) per month ($2,364 incl GST for the year)
Would you like to view the ESS BIZTOOLS’ Business Advisory Services Starter Package Product Brochure? If so, please click here.
Our theme for promotional videos in the past week has been “Getting Ready to Deliver Business Advisory Services”.
You are invited to “Book A Demo” on ESS BIZTOOLS with Peter Towers, Managing Director, ESS BIZTOOLS to gain a better understanding of the services that are available within ESS BIZTOOLS and ESS BIZGRANTS?
You can book a demo at www.essbiztools.com.au or contact Peter Towers:
Have a great day!
Watch out for the next episode of "Accountant's Minute" or subscribe to the podcast on iTunes for more news, ideas and tips on providing outstanding non-compliance services to SME clients.
Episode 278 - Predictive Accounting - 3-Way Forecasting Adds Real Value
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