Budgeting And Forecasting for Small and Medium Size Businesses

 

Budgeting and forecasting are critical activities for businesses during difficult economic periods. Especially in the economic environment when interest rates are raising, businesses need to allocate resources to preparing and reviewing their budgets and evaluating their forecasting methodology. This is examined in the workshop described below that small and medium size businesses could find useful.

 


How does my business revamping a budgeting process to meet organization’s needs?

-          Cross-functional approach to budgeting (identifying support roles and operational/key roles)

-          Linking budgets to strategy and priority while adjusting to new economic conditions

-          Identifyiing planning periods and forecasting methods (rolling forecasts, fixed period forecasts, perpetual forecasts)

 

How should forecasting be reviewed in my business?

-          Key questions to ask when reviewing the forecasting and budgeting processes? (e.g. assessing budgeted overhead expenditure versus actual (including rate of inflation)?; any issues with cash forecasting and any reasons to revise it (including fluctuating interest rate)?

-          Assessing ‘accuracy’ of forecasts and appropriateness of budgeting assumptions

-          Adjusting budgets and forecasts as appropriate

 

Readings:

 

Re-Anchor Your Next Budget Meeting by D.Lovallo and Olivier Sibony (https://hbr.org/2012/03/can-you-re-anchor-your-next-bu)

 

Allocating Capital When Interest Rates Are High by Harsha Misra – January 05, 2023 (https://hbr.org/2023/01/allocating-capital-when-interest-rates-are-high) Over the past decade, interest rates were near zero, capital flowed freely, and business executives lined up to fund dream projects. Financial markets could not seem to get enough of this action: rewarding the “dreamiest” leaders, ventures, and concepts to an almost unfathomable degree….

 

This outline was suggested by Alla Volodina (York University).For other ideas on training and education on various topics, refer to Alla Volodina Rate My Prof: allavolodina.com

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