REVEAL

Encore Dynamic Financial Forecasting

Financial forecasting is a key element to planning and managing the growth of your company. The process of preparing the forecast and monitoring it will give you deep insights to your company’s operations and potential growth. It will help your company: 

• Plan for profit.  Set financial goals and boundaries for financial periods instead of the owner just getting what’s left over at the end of the year!
• Analyze pricing of products and services. Understanding which products or services are making you the most profit is key to a company’s success. 
• Manage Labor Cost.  Create a labor model to optimize between low labor costs and paying your employees well.
• Plan Employee Hiring.  Track labor costs and impacts to the company’s labor model to know when it is time to hire more employees.  It also helps you identify which area will give you the biggest financial return.
• Design Employee Incentive Plans. Align the financial results of the company with the employees’ performance and incentive pay.
• Plan Purchases of Equipment, Real Estate, or Other Assets. Determine when growth outlooks will require additional resources to grow your business.
• Identify Bottlenecks to Growth. Identify what is the next investment, whether a physical asset or a new employee, that produces the most return for the company.  
• Identify Working Capital Needs.  Know when and how much money your company needs to support growth.
• Strengthens Banking Relationships. Giving your bank a roadmap to your year helps them understand your company better and properly structure loans to help your company grow.
• Manage Owner’s Return on Equity. Determine the factors that improve the company’s return because ultimately the goal is to produce a superior financial return for the owner.  
• Plan for Owner Distributions.  Determine the right amount of money that is safe to distribute to owners, and the pace of distribution.
• Builds Value in Company. Demonstrate to a potential buyer that growth and cash flow are planned, not a haphazard occurrence.  Buyers pay more for certainty!

Encore Advisory collaborates with company management to develop a detailed monthly forecast for the company. The Encore Financial Forecast is dynamic, meaning it is continually updated based on circumstances your business faces at the time. The collaboration process of developing the forecast and reviewing it every month will improve your management team’s financial acumen, teaching them how the financial aspects of your company interact with the operations.

In addition to forecasting and tracking your income statement, balance sheet, and cash flow, our forecast includes key metrics such as your sales funnel, labor cost metrics, and bank health so you see their effects on your company’s bottom line.