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Make Faster, More Accurate Forecasts with Automation

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insightsoftware is a global provider of reporting, analytics, and performance management solutions, empowering organizations to unlock business data and transform the way finance and data teams operate.

23 04 Blog Moreaccurateforecasts Website

The last couple of years have been volatile for the finance industry. Runaway inflation, rising interest rates, and recent bank failures have finance leaders on edge and looking for ways to shore up their defenses as recession becomes more likely.

In periods of economic uncertainty, financial planning and analysis (FP&A) teams become more important than ever. Organizations depend on FP&A teams to provide accurate forecasts that enable continued success.

However, recent insightsoftware research has revealed that skills shortages in FP&A teams are slowing processes down and making it harder to deliver accurate forecasts in a timely manner. In addition to prioritizing training and development for FP&A team members, finance leaders are looking to software implementation and automation to bridge the gap. With the right technology investments, FP&A teams can improve budgeting and forecasting accuracy and shorten cycle times, allowing organizations to remain agile and confident in an uncertain market.

What is Automated Forecasting?

Automated forecasting represents a pivotal advancement in the realm of data analysis and prediction, leveraging the power of artificial intelligence (AI) and machine learning (ML) algorithms to predict future trends, behaviors, and outcomes based on historical data. This innovative approach streamlines the forecasting process, making it more efficient, accurate, and accessible to businesses and organizations across various industries.

The Essence of Automated Forecasting

At its core, automated forecasting is about utilizing technology to predict future events without the need for constant human intervention. By feeding historical data into sophisticated algorithms, these systems can identify patterns, trends, and relationships that might not be immediately apparent to human analysts. This capability allows for the generation of forecasts with a higher degree of precision and in a fraction of the time it would take using traditional methods.

Key Benefits of Automated Forecasting

  1. Efficiency and Speed: Automated systems can process vast amounts of data at incredible speeds, delivering forecasts in a timely manner. This rapid analysis capability is crucial in fast-paced environments where decisions need to be made quickly.
  2. Accuracy and Reliability: By eliminating the potential for human error and bias, automated forecasting provides more accurate and consistent predictions. Machine learning models can also adapt and improve over time as they are exposed to more data, further enhancing their accuracy.
  3. Scalability: Automated forecasting solutions can easily scale to accommodate growing data sets and increasingly complex forecasting needs, making them suitable for businesses of all sizes.
  4. Cost-Effectiveness: While the initial setup of an automated forecasting system may require a significant investment, the long-term benefits of reduced labor costs and improved decision-making can lead to substantial savings and increased profitability.
  5. Data-Driven Decisions: By providing reliable forecasts, automated systems empower businesses to make informed, data-driven decisions. This can lead to improved operational efficiency, better resource allocation, and enhanced strategic planning.

The Importance of Rolling Forecasts During Financial Uncertainty

Traditionally, most businesses have managed their financial planning through pre-planned, time-limited budgets—for example, one year ahead—that serve as a plan of action for the business period forward. While this is a well-established way of managing the financial planning of a business, annual planning cycles are no longer adequate to the task of running a business amid a highly volatile economic climate. Many companies are responding to recession predictions by looking to replace—or in some cases, complement—their traditional budgeting processes with rolling forecasts.

A rolling forecast is an ongoing income and expenditure forecasting process that requires regular review and subsequent additions and adjustments. For example, an initial forecast is set for four quarters of a year. As Q1 in year 1 is over, a review is done of the remaining forecasts by looking at the results in the first quarter. Thereafter, another quarter (Q1 in year 2) is added to the forecast. This is a continuous planning process, and the forecast is adjusted to reflect the actual business outcome. This approach gives a more realistic view of the future and a chance for the business to adapt its future actions.

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Rolling forecasts offer a great deal of benefit to organizations facing financial uncertainty, including:

  • A more realistic and up-to-date view of how the business is affected by internal and external factors.
  • Increased organizational agility and flexibility.
  • Positions the organization one step ahead during times of volatility.
  • Serves as efficient resource planning for businesses with short business cycles or businesses with a lot of uncertainty.

With the pace of change and uncertainty facing businesses today, rolling forecasts allow you to easily keep up with pressures to provide more timely, accurate, and relevant forecasts.

Manual Forecasting Processes Don’t Work Anymore

The planning and forecasting tools provided with most ERP systems provide limited flexibility, and typically require a considerable amount of manual effort. If your organization is operating according to an annual planning cycle, then manual processes may be inconvenient but workable. As the frequency of planning cycles increases, though, the effort involved with updating plans using manual processes becomes untenable.

Effective management of a continuous planning process calls for a different approach. Purpose-built planning and forecasting tools can offer the simplicity and familiarity of Excel while incorporating the robust collaboration capabilities necessary to collect and process input from stakeholders across the organization. By doing away with a fragmented approach that relies extensively upon manual processes, finance leaders can increase the frequency of planning cycles while reducing the overall time and effort needed to perform planning and forecasting activities.

Automate Forecasting for Better Results

Discover a better way of planning that shortens cycle times and produces more accurate results, so you can make informed decisions that help your business successfully navigate an uncertain market. Bizview from insightsoftware is a robust, web-based planning tool that enables managers to automate manual processes and increase planning cadences by facilitating collaboration across the organization. Bizview simplifies planning processes, making continuous planning and rolling forecasts feasible, and increases accuracy, supporting managers in driving smarter business decisions.

Bizview adds value to your planning and forecasting processes in the following ways:

  • Faster delivery: Shorten reporting cycles by automatically combining plan and live actuals in one Excel report
  • Granularity: Speed up variance analysis with integrated drill down to granular ERP data
  • Transparency: Gain deeper visibility into planning processes with easy access to data from any ERP module
  • Scalability: Easily scale and adapt to changing business needs with integrated workflows, analytics, and dashboards
  • Higher levels of automation: Leverage automation to respond more quickly to changing events

If you are looking for a way to better prepare for an uncertain future by automating manual budgeting and forecasting processes, schedule a demo to explore the possibilities of creating rolling forecasts in Bizview today.

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