Financial projections are estimates of the future financial performance of a business. This involves how much profit the business is estimated to make, how much money needs to be put into the business and whether it is expected to make a profit or a loss. It is also a great way of making targets for your business by defining the financial results you expect to happen and what you expect to spend in order to get there.
Rather than it merely being a prediction, a financial projection should be a guideline to how and what will happen financially, therefore if stuck too, the desired results should be achieved.
Planning and working on your financial projections regularly is a very important aspect of running a business. It gives you a clearer idea from the beginning how the businesses finances should pan out, what course is best to take, and allows you to see clearly whether any financial changes need to be made in order to make your business more profitable.
Regular projections will also help you re evaluate the company’s strengths and weaknesses and can help you deal with any unexpected financial problems or any opportunities that may come your way.
If you would like any more information on financial projections or would like some advice on an existing projection then please do not hesitate to phone or email us, or alternatively, you can simply use the live chat link available.
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About The Author
MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.