A financial forecast is invaluable in identifying potential funding issues in a timely manner so that these can be addressed before it is too late. It is much easier to raise finance in advance of an issue arising than waiting for it to occur. This demonstrates management competence, whereas attempting to raise finance at the last minute reflects poorly on management and makes it more difficult to secure funding.

Typical questions to ask yourself - do you have adequate finance in place?

• Organic growth - Will additional stock be required? How much additional cash will be tied up in debtors? Will suppliers extend their credit terms? How much will overheads increase to support the growth?
• Acquisitions - does the business have access to sufficient resources to take advantage of any opportunities that arise during the year?
• Dividends/remuneration - How much free cash will be available to increase the rewards to the owners of the business?
• Potential losses - does the business have sufficient funding in place to cover potential losses?
• Cost savings - Where can costs be cut to improve profitability or reduce losses?
• Banking covenants - Is there a risk that banking covenants will be breached?

In order to assist management reach the answers to these questions it is important to have a reliable and robust financial forecast - a forecast which includes a profit and loss, cashflow and balance sheet.

Whilst a forecast is management's assessment of what may or may not happen, in our experience the process of putting together the model itself is a valuable learning exercise for management which can have benefits beyond financing issues.

In particular, we find that a thorough review of the profit and loss account often yields an insight of how business performance can be improved.

Every business needs to plan ahead to ensure success, but daily pressures often delay the forecasting process.

We can help prepare a financial forecast, which enables you to forecast your profit levels and cash flow requirements and provide a benchmark against which you can measure your actual results. We will challenge the assumptions used and provide a sense check on the numbers based on our vast experience of helping clients go through this process.

Rather than being just a one-off exercise, our corporate finance specialists are more than happy to help you to update the forecasts throughout the year as circumstances change and further information becomes available.