Business Life Cycle Management
What Is Forecasting?
To Forecast is to estimate, predict, or calculate, in advance, based on understanding historical information and planning for trends.
Wouldn’t it be more advantageous to use information that historically proved valuable, and then adopt that knowledge to what is going on now and what might happen in the future?
What’s the Difference Between Budgets & Forecasts?
While budgeting can be likened to looking in the rear view mirror, i.e., learning from what has occurred in the past, forecasting is like looking out the windshield to what is really happening in real time and then adjusting for what might occur based on real facts.
Forecasts allow you to make necessary changes on a regular basis and are dependent on what is actually happening.
Forecasting is the Basis for Planning
Forecasting should be the basis for your most important planning decisions. For example, you need to be able to predict how to plan for additions to staff, salary increases, changes in scheduling, facility costs, labor requirements, benefit increases, inventory, production, expense increases, purchasing, etc. After Actuals occur and new Forecasts are developed, the Budget is no longer what is managed to; it is now only a reference point. Every new Forecast becomes the basis to manage to.
Forecasting allows you to combine insights with facts to make better decisions and stops you from making emotional or gut decisions that may feel right at the time but don’t hold water after seeing the anticipated results after forecasting.
Tracker Enterprises, Inc.™ will help prepare Forecasting for your practice.
For more information about understanding Forecasting and how it will help you to succeed, contact us and/or read Chapter 19 of Dr. Pavlik’s book, Business Essentials for Healthcare Professionals available at Amazon by clicking here.