A recent walk through my childhood town’s shopping centre left me feeling a little unnerved. Signs were up in about a dozen shop windows bearing the simple notice: ‘Sorry, this shop is now closed’. The fact that no further explanation was given (or needed) suggests to me that we are inherently accepting the failure of businesses as a sign of the times. The forecast looks bleak. Or does it?
There seem to be a mountain of conflicting reports concerning the future outlook of the recession. On the one hand, there’s a feeling that we might be over the worst of it; on the other, we could have a fair few years to go until the economy has completely recovered.
But there has been doubt raised over the validity of these financial forecasts. According to recent news, Chief Financial Officers (CFOs) could be making fundamental errors by basing their predictions on annual budgets and out-of-date information. Only 37% of those surveyed claimed to be updating their forecasts on a monthly basis; the rest admitted to relying on annual reports to help them predict future trends.
If you’re the one in charge of predicting your company’s financial outlook, it’s hugely important that you analyse the most up-to-date information so that budgets can be planned appropriately. If you haven’t already, put a risk adjustment plan in place to help your business survive the downturn.
The status of the recession seems to be changing daily – it’s up to you to keep up with these changes and prepare for a brighter looking future…whenever that may be.
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