Ecommerce Budgeting and Forecasting
It's that time of year! Time to finish (or start) your 2025 plans. Here are the What, Why, How, When, and Who of budgeting and forecasting.
What
In my experience at LedgerGurus , there are 3 planning tools that help in ongoing financial execution:
Why
Budgeting gives a picture of what future profitability (profit and loss) may be. Reality never goes according to plan, but good financial modeling can identify issues or needs to execute a business strategy.
Keeping on top of cash flow is imperative for every product business. An annual cash-flow forecast can identify cash-limited times of year and credit or other lending needed to address those times.
13-week cash flow forecasts provide more precise insights to know when to use or pay back credit \ loans.
How
I start with an annual budget that projects our expected outcomes. This is followed by an annual cash flow forecast that incorporates the timing of cash incorporating an inventory purchase plan. Finally, I use a 13-week cash flow forecast for precise insights and tactical decision-making.
Who
A budgeting and forecasting process involves collaboration between various people in an ecommerce \ consumer product company. Groups that need to be involved to be successful include:
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When
Budgeting and forecasting should be continuous. Conduct an annual budget and cash flow forecast at the start of the year and update a 13-week cash flow projections weekly.
Go Deeper
I have a detailed conversation on these points in the Ecommerce Finance Podcast episode 2: Ecommerce Budgeting & Forecasting: What, Why, How, When, & Who
Listen or Watch the Ecommerce Finance Podcast Episode 2:
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?? Apple Podcasts: https://lnkd.in/gSkiXhJw
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