Q&A: Introducing Forecast 5by
AccountingWEB caught up with Geof Nightingale, founder of financial forecasting software innovator Forecast 5.
Financial forecasting software Forecast 5 set out on a mission to replace the now-obsolete Sage WinForecast, creating a product that would give accountants the tools they needed to customise the forecasts and reports they produce.
Forecast 5 generates forecasts for profits and losses, funds flow and cashflow, along with forecast balance sheets. Once the reports have been run, they can then be exported to Excel for graphing. The product integrates with Xero so it can supplement the native P&L forecast with balance sheet and cashflow forecasts to build budgets around meaningful future expectations.
AccountingWEB caught up with Forecast 5 founder and New Zealand chartered accountant Geof Nightingale to learn more about its latest project.
1. What are you doing right now?
At the moment, we have two major projects on the go. First is the development of our Forecast 5 web version. This is in progress and hopefully only a few months away.
Second, Excel dashboards. Currently, we are developing a dashboard interface with Forecast 5 to Excel. This involves Excel Power Query, Power Pivot graphics and delivering customisable reporting to our end users. I found that most of the financial controllers were generating board reports in Excel and thought if we made Forecast 5 data easily available to Excel they would enhance their board reporting by adding the projections which are then easily updated
My goal is to create user-capable reporting in Excel or Power BI – primarily Excel as this is the solution most of our clients are familiar with.
2. What sets Forecast 5 apart from your competitors?
Forecast 5 focuses on budget and budget process, simplifying and making it accurate and provable. From the budget, a cashflow is created and we then report actuals, rolling budgets and variances for up to 15 years and more. We also deliver 90-day daily rolling cashflows.
Our product does the complete reporting set of profit and loss, balance sheet, cashflow and funds flow with schedules, graphics and variance reports. The cashflow variance report is such a valuable report.
To see the real world impact it would have on your bank balance if debtors were under-collected is incredible. Other products refer to forecasts and direct cashflow. But a forecast is not a budget. Frequently, balance sheets aren't provided and abnormal items aren't catered for – thus they are not comprehensive.
Few if any other products include tax or show each record having its own cashflow. We offer budgets and forecasts as graphical reporting dashboards.
At Forecast 5 we understand that the profit balances the balance sheet in retained earnings. Very few accountants realise that the cash movement in the cashflow (direct cashflow) in Forecast 5 equals the cash movement in the funds flow (changes in cash balance sheet values or indirect cashflow). That gives us the ability to prove that the budget model balances and is reliable.
3. What products and updates do you have coming out in 2021?
Aside from our new Forecast 5 web version, we are building integration with Excel by creating views on the Forecast 5 data. Then, using Excel Power Query you can extract any data – this can be refreshed at a click of an Excel button. We can now do pivot reports, P&Ls and so on to create graphics-rich board reports with your own loan covenants as defined and built by you.
The next development will be sales budgets; commonly a budget starts with products, customers, gross profit combinations and then is totalled to a GL code. We will create a process to enable the sales team to create budgets and forecasts that total in to one or many GL Codes and can be updated on a rolling basis.
I really like the evolution of key performance indicators – known as Memos in Forecast 5. We have taken these non-financial records and added the ability to create formulas in the Memos. Now you can report them with actuals and variances. We can show KPIs in our Variance Analysis, reporting budgeted vs actual KPI achievement.
4. How has lockdown been for you? What have you been doing?
We spent our lockdown time building daily cashflow modelling and we offered some significant incentives to help clients out. We also acquired some new clients.
5. Tell us a secret about Forecast 5 that no one knows
One of our clients is an English Premier League soccer club in the UK. They define the players as assets and set them up under their own department in Forecast 5. They then had Forecast 5 changed to show gain or loss on sale of the player (asset) into that department versus as an extraordinary item.
Final question: You have a brand-new iX channel on AccountingWEB. What can readers expect to find there?
Current auditing and accounting issues that need strong and robust forecasting solutions. For example, the FRC highlighted going concern statements as an issue when the regulator found numerous inconsistencies in the underlying forecasts. These had been audited – and presumably found acceptable – by the biggest audit firms in the UK. We hope to be able to show how these forecasts can be done in a more reliable, consistent manner.