Why Forecasting Matters
Let’s be blunt: compliance reporting is looking backward. Forecasting shifts the conversation forward.
- Clients Don’t Just Want Numbers, They Want Guidance
Year-end accounts and tax returns don’t help a business owner make next week’s payroll or plan next quarter’s expansion. Forecasting translates data into decisions. - Advisory Starts Here
Every firm says they want to “do more advisory.” Forecasting is the natural bridge. It’s structured, repeatable, and creates conversations about growth, cash flow, and strategy. - You Get Sticky With Clients
A client will switch accountants for cheaper compliance work. They won’t leave the person helping them navigate the future. Forecasting increases retention and creates higher-value billing opportunities.
What Firms Are Actually Doing
The firms making forecasting work aren’t building 50-tab spreadsheets from scratch. They’re layering forecasting into their existing workflows with practical steps:
- Rolling Cash Flow Forecasts
A simple 13-week forward view of inflows and outflows. This is the starting point for most firms and the most immediate value driver. - Driver-Based Revenue Models
Instead of just extrapolating sales trends, some firms tie forecasts to business drivers: billable hours, room occupancy, units sold. This makes forecasts more realistic and useful. - Scenario Planning
“What happens if we lose our biggest customer?” “What if we add two new hires?” Firms are using forecasting software to model multiple scenarios and show clients the impact instantly. - Technology Leverage
Tools like Fathom, Spotlight, and Jirav are becoming common add-ons to QBO and Xero. They pull data automatically, reducing the manual grind of updating forecasts.
Example: A landscaping business I worked with used to budget once a year. It was outdated within three months. By moving to rolling forecasts tied to seasonal sales drivers, they were able to predict cash dips months in advance—enabling them to line up credit early instead of scrambling.
How to Start in Your Firm
You don’t need to become a Fortune 500 FP&A team overnight. Start lean:
- Pick the Right Clients
Not everyone needs forecasting. Start with clients who:- Have recurring revenues or consistent expense structures.
- Struggle with cash flow timing.
- Are actively planning growth or investments.
- Start With Cash Flow
Forget complex P&L projections. A 13-week cash flow forecast is the easiest entry point and the most universally valuable. - Choose a Scalable Tool
Don’t build monster spreadsheets. Use apps that integrate with your accounting platform. They update automatically and are client-friendly. - Keep It Conversational
The forecast isn’t the deliverable—the conversation is. Use it as a framework for monthly or quarterly check-ins. The numbers are just the hook. - Charge for the Value
Don’t give forecasting away as a “free extra.” Position it as part of an advisory package. Frame it as decision support, not number crunching.
Where This Leads
Firms that get forecasting right see three things happen:
- Revenue Per Client Goes Up
Clients pay for insight, not just compliance. Forecasting naturally leads to higher advisory fees. - Client Relationships Strengthen
Forecasting forces regular discussions. That keeps you front-of-mind as a strategic partner. - The Firm Becomes Future-Focused
Instead of talking about what already happened, your team starts talking about what’s next. That shift changes everything—internally and with clients.