Maintain robust financial forecasts and scenario planning
Business continuity & financing | Thrive: Prepare for the next normal
Using Scenario Based Forecasting
Preparedness in an uncertain environment
COVID-19, oil price shocks, and travel bans are all creating uncertainty regarding the current business environment. And as the impact of COVID-19 becomes more permanent, it is important that businesses are proactive in assessing their capability to withstand disruption and the options they have to identify, and respond to, potential opportunities. This article discusses the role scenario-based forecasting can play in navigating company finances through this level of uncertainty and disruption.
Topics covered in this article:
- Creating a core team that develops and manages scenario definitions and reforecasting
- Defining plausible alternate futures in which the impact of decisions will be assessed
- Customising scenarios to particular contexts and challenges, including less obvious possibilities
Financial Forecasting to Help Navigate Uncertainty
Providing clarity for stakeholders
What We Are Seeing
With the global spread of COVID-19, businesses need to be proactive in assessing their capability to withstand disruption from both an operational and a financial standpoint. Financial forecasting is a key tool that can help businesses in this effort, providing leaders with the information they need to take action as well as instill confidence in their stakeholders. This article outlines the questions companies need to ask as they develop realistic, detailed, and extended financial forecasting.
Topics covered in this article:
- Trading forecasts, including assessing the impacts on supply and demand as well as operations in affected areas
- The role of cash flow in forecasting and what actions may need to be taken to improve liquidity
- The availability of necessary forecasting tools and the ability to deploy them
Nnamdi Lowrie
