Profit & cashflow forecasting
Without regular profit & cashflow forecasting a business is at the mercy of the business environment, reacting to changes rather than being prepared for them. In addition, forecasting allows management to implement programmes to restructure the business sooner, maximising returns and ensuring change can be managed effectively, rather than firefighting.
Forecasting also provides the first stage input to the management accounts, setting budgets and targets for staff and management alike so that the business can navigate effectively through the opportunities and threats that present themselves throughout the life of a business.
It is worth bearing in mind that a well run business is much better received at the bank when additional funding is required for expansion or to cope with a downturn.