Forecasting: The Steps I Follow
1. Segment Your Clients
Start by identifying who’s likely to benefit most:
- Firms with regular cash flow challenges
- Businesses planning hires, investing, or scaling
- Companies disciplined enough to act monthly/quarterly on insights
2. Begin with a 13-Week Rolling Cash Flow
This is your bread and butter — simple, invaluable, and high-impact:
- Pull actuals: cash balance, receivables, payables, payroll, recurring revenue, fixed expenses
- Build a 13-week rolling model: project forward one week at a time as actuals come in
- Review monthly or biweekly to catch cash gaps and react quickly
3. Layer in Driver-Based Logic
Once the rolling view is solid, add business-specific drivers:
- Billable hours or bookings
- Average transaction values
- Seasonal demand shifts
This turns static numbers into dynamic scenarios — showing clients why things move, not just how much.
4. Integrate Backlog & Pipeline Data
This is where forecasting becomes strategic:
- Backlog Reviews: Update projected revenue from signed contracts or recurring service agreements. It uncovers revenue you may have overlooked.
- Pipeline Reviews: Track proposals, value, and close probabilities. It creates visibility and accountability around future income, especially for client sales teams.
This combo—driver-based logic plus backlog/pipeline—improves accuracy dramatically and gives clients real foresight.
Why This Matters
- Clients get clarity on what’s coming, not just what’s already happened
- The forecast becomes the driver of regular, value-driven conversations
- This process builds trust—and sticky, higher- margin advisory relationships