Creating a financial forecast can help your business prepare for the future. You’ll have a better understanding of how much revenue your business will generate and how much money your business will spend on expenses. While there’s no way to predict the future, creating a financial forecast is the next best thing. If you use QuickBooks Dekstop Premier, Enterprise or Accountant, you can create a financial forecast in just a few easy steps.
What Is a Financial Forecast?
A financial forecast is exactly what it sounds: a forecast of your business’s finances. It takes into financial data to “predict” your business’s future finances
QuickBooks supports two types of financial forecasts. You can create a financial forecast report manually by inputting financial data, or you can opt to create a financial forecast automatically using financial data from your business’s previous year of operations. Both types of financial forecasts serve the same purpose. They predict your business’s future finances. The former type of forecast simply requires manually inputting financial data, whereas the latter type of forecast leverages financial data automatically from your business’s previous year of operations
Steps to Create a Financial Forecast
To create a financial forecast, log in to QuickBooks and click the “Company” menu. Next, select “Set Up Forecast” under “Planning & Budgeting.” You should see an option to create a new financial forecast. Clicking this option will begin the forecast creation process. As long as you’re using one of the QuickBooks versions listed above, you can create a financial forecast by following these steps.
You’ll need to choose a year for the financial forecast. This is the year for which you want QuickBooks to predict your business’s future finances. While optional, you can also choose tracking elements. Maybe you can create a financial forecast for a Job, or perhaps you want to create a financial forecast for a Class. You can choose tracking elements such as these when creating a financial forecast for your business.
The final step is to select the type of financial forecast that you want to create. You can create one of two types of financial forecasts: a forecast created from scratch, or a forecast created using your business’s previous year of financial data. After selecting your preferred type, QuickBooks will generate a financial forecast. You can use this financial forecast to better predict your business’s future finances.
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