Forecasting on the rise in 2016
Tom Herbert marks the end of his forecasting, planning and budgeting spotlight series with a look back at this year’s trends in the forecasting scene.
Back in January AccountingWEB’s John Stokdyk predicted that this may be the year when business forecasting finally takes off, with a new generation of cloud contenders stepping in to fill the void left by the much-missed Winforecast desktop tool.
While 2016 hasn’t quite seen the cloudburst of practitioners and finance directors flooding to use cloud forecasting software, it has marked a surge of interest in forecasting tools and techniques, and in the future this year may be seen as a tipping point for the industry.
Cloud players such as CrunchBoards, Spotlight Reporting, GearShift and Float are relative newcomers, but they have made a significant impact during the past year.
After a series of new product launches, accountants in business and practice are beginning to respond to both the newcomers and existing tools. On AccountingWEB, meanwhile, there has been an increase in the number of forecasting questions in Any Answers, albeit from a low base in previous years.
There are any number of potential reasons for this interest: a wish to stay ahead of the curve in uncertain and competitive times; an improvement in the tools available; the accessibility of such technology; and (perhaps most importantly) their comparative price.
Among the key strengths allowing cloud developers to carve out a new market for forecasting tools is scalability and flexibility, allowing small businesses the chance to benefit from powerful forecasting software that can do the heavy lifting for them.
Once the links have been put in place to the chart of accounts in a cloud accounting system, online forecasting tools give users real time graphs of performance and projections across a wide variety of measures and KPIs. For an adviser, these dynamic data points offer an opportunity to start a conversation about what the company could do to alter the underlying trends. Or the same source data could be massaged into a set of scenarios with different underlying conditions to carry out “what if” analyses.
While these tools obviously help with the cold, hard financial figures, they also play a part in the growing involvement of accountants in other areas of business.
Jim Shirley, finance director at craft brewers Fourpure told AccountingWEB how cloud forecasting software (in this case Crunchboards) has allowed him to incorporate non-financial KPIs such as production yield into his scorecard, increasing the business’s gross margin percentage through less waste, lower utility costs and optimal ingredient use.
All this spells good news for accountants, who will become increasingly valuable to businesses, as they will be able to use these new tools to benefit the business and bring the numbers to life through visualisation.
Speaking to AccountingWEB last month, Tom Bogan of Adaptive Insights also discussed how in the not-too-distant future companies will be able to compare their plans or results across a broad cross-section of anonymised benchmarks from organisations across their industry.
So will these unpredictable times usher in an even greater role for the humble forecasting tool? Will they bring about a consolidation of existing players? Or perhaps new, innovative ideas such as collective forecasting will come to the fore and take the world of forecasting technology in a different direction.
What is clear is that there are fascinating developments ahead that will help shape the role of accountants in modern business, and AccountingWEB will be here to follow them.
We hope you enjoyed the 2016 forecasting spotlight series. If you have any forecasting tips, tools to recommend or questions you’d like answered feel free to let us know in the comments below.