Use real-time financial information to budget effectively based on data-driven forecasts – and track your performance.
What is budgeting and forecasting?
Budgeting is about creating a plan for how you will spend your money over a specific period. It includes anticipated income and expenses so that you can allocate resources to different activities.
Forecasting involves predicting future financial outcomes based on analysis of past financial performance and planned future activity. It helps you to anticipate future financial performance and adjust your strategies and investments accordingly.
What are the common pitfalls for construction industry businesses?
One of the biggest problems for small businesses is the lack of a forecast. Not having a forecast can result in nasty financial surprises when you run your end of year accounts because you didn’t realise the impact when something didn’t go to plan.
It can sometimes be difficult to recognise the loss in the right accounting period. If you use a percentage of completion method and you don’t estimate correctly, errors can occur which results in losses being incurred in future periods. To avoid this type of mistake, it’s vital that you enact effective cost, budget and job controls on a regular basis.
Where does Prevail add value?
As well as helping you to establish a regular cadence in your profit and loss analysis and cost control, we can help you to recognise costs in the month they are accrued and to account for them correctly. Even if invoices for a job are delayed and you’re using the accrual basis for cost allocation, we can help you ensure regular and effective control so that mistakes and misleading numbers are avoided.