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To make 2015 better than this year, analyse these three elements of your business' finances

by , 10 November 2014
Forecasting your business finances for the year ahead will help you prepare for what's coming.

Without it, your plan of action for 2015 may be hopelessly ineffective.

But if you want to make 2015 a better year than this one, you need to analyse the right information.

So when you start the forecasting process, ensure you look at these three elements in your business finances...

 

Three elements of your business finance you must analyse for effective forecasting

 
1. Your expenses from the last three years
You need to assess how your expenses have changed over the past three years. Have they simply increased in cost (the expenses haven't changed, they're just more expensive each year? Or have you slowly incurred more and more expenses as your business has grown?)
 
Analysing this will help you predict what your 2015 expenses will look like.  
 
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2. Your income from the last three years
You need to look at your income from the last three years, paying special attention to the trends. For example, does your income normally drop in August and increase again in October? If you can see this trend across the past three years, it's safe to say it will happen in 2015 as well.
 
3. Your growth over the last three years
If your company grew financially and in size over the last three years, you can predict the same growth rate will carry on in 2015. This will help you work out what you're doing right that's causing this growth so you can keep doing it.
 
Analysing these three things in your company's finances means you have enough information to plan for 2015 and make it an even better year than this one.
 
Check out the Practical Accountancy Loose Leaf Service for more tips to prepare your finances for 2015. 
 


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