How do you budget and forecast across multiple entities?

1 Define your scope and objectives

The first step in budgeting and forecasting across multiple entities is to define your scope and objectives. What are the entities that you need to include in your analysis, and what are the key drivers and assumptions that affect them? How do you align your budget and forecast with your strategic goals and priorities? How do you communicate and coordinate with the stakeholders and decision-makers of each entity? These are some of the questions that you need to answer before you start building your financial models and scenarios.

2 Choose your tools and methods

The next step is to choose the tools and methods that you will use to budget and forecast across multiple entities. Depending on the size and complexity of your business, you may need to use different software applications, spreadsheets, or databases to store and manipulate your data. You also need to decide on the level of detail and granularity that you will use for each entity, and how you will consolidate and aggregate them. You may also need to use different methods and techniques, such as top-down or bottom-up approaches, rolling forecasts, or variance analysis, to create and update your budget and forecast.

3 Establish your standards and rules

Another important step is to establish your standards and rules for budgeting and forecasting across multiple entities. You need to have a common framework and language that everyone can understand and follow, and that ensures consistency and accuracy across your data. You need to define your key performance indicators (KPIs), metrics, and targets for each entity, and how you will measure and report them. You also need to set your timelines, deadlines, and responsibilities for each stage of the budgeting and forecasting process, and how you will handle changes and revisions.

4 Manage your risks and uncertainties

One of the biggest challenges of budgeting and forecasting across multiple entities is to manage the risks and uncertainties that may affect your financial performance. You need to identify and assess the potential internal and external factors that may impact your revenue, costs, cash flow, or profitability, and how they may vary across your entities. You also need to create and test different scenarios and sensitivities, and how they may affect your budget and forecast. You also need to have a contingency plan and a mitigation strategy for each risk, and how you will monitor and respond to them.

5 Review and evaluate your results

The final step in budgeting and forecasting across multiple entities is to review and evaluate your results. You need to compare your actual performance with your budget and forecast, and analyze the causes and effects of any deviations or discrepancies. You also need to assess the accuracy and reliability of your data, models, and assumptions, and how they may change over time. You also need to provide feedback and recommendations to improve your budgeting and forecasting process, and to adjust your plans and actions accordingly.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?