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Jarmo Manninen & Muutosdraiveri Oy
How does your company predict the achievement of its profit targets?
Of course, forecasting a company's profit should be based on the most reliable, credible and concrete data possible. However, when it comes to forecasts, my follow-up question is: What is this data? The following is a list of the sources of information for company profit forecasts, based on my experience, in order of importance:
1. The company's order book.
2. Information received from the company's customers.
3. The company's offer book.
4. The impact on the results of implementing the change measures in the company's action plans.
5. The impact on the results of implementing plans made based on the company's strategy.
6. Other company-specific data sources, such as data from the company and its people's networks or other data sources.
If forecasting a company's profit figures is based on making forecasts based on the actual figures in the company's external accounting profit statement, then this seems to me to be completely useless and not worth spending the company's resources on. In my opinion, this is done purely on the basis of assumptions and guesses. In addition, the company's profit forecasts made in this way are often overly optimistic and based on unfounded beliefs. When the company's profit forecasts made in this way do not come true, the situation is tried to be fixed with explanations produced by the imagination without any concrete basis.
I hope that what I have said above is not true in your company. Did the things presented above arouse thoughts in you?
I encourage you to share this blog post of mine on social media. If you have any suggestions for the topics of the next blog posts, I will gladly accept them.
I hope that you were interested in this matter and that you can continue to be involved.
I have written four books on creating the conditions for the company's financial management, and they are available in well-stocked bookstores and online bookstores in Finland, for example from BoD (Books On Demand) at:
https://kirjakauppa.bod.fi/catalogsearch/result/?q=jarmo+manninen
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