Broken Forecasting Process
A privately held healthcare services company had been missing its quarterly revenue and profit budget on a recurring basis. The company's executive management and board lost confidence in the finance department holding them responsible for the company's inability to accurately forecast future financial performance. The finance department team was frustrated because it relied on operations and sales management for input in order to forecast performance and too often that information was off the mark. As a result of consistently missing budgeted performance (sometimes with a positive miss), the company felt handcuffed in its ability to make spending and strategic decisions. In order to have confidence that they could meet financial and other business commitments, they needed a more efficient and accurate forecasting process.
SBC worked with the company's operations and sales departments with support provided by the finance department to analyze the revenue process from the beginning at entry into the sales pipeline all the way through client invoicing. Using this process flow, the team identified and developed key measurement points and metrics that would provide greater insight into future revenue streams. This was followed up by the creation of a process and communication stream so that the finance department would have access to timely and reliable information for use in forecasting. The improved accuracy and flow of information increased management awareness and now enables them to make real time spending and strategic decisions providing greater financial stability. The company's executive management and board have more confidence about the information being generated by the finance department. As a result of the guidance provided by SBell Consulting, the company is spending less time agonizing about its decisions and more time making decisions moving the company forward towards its strategic goals.