Financial Forecasting & Best Practices

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‘If you fail to plan you plan to fail’ is the advice from Transport Financial expert, Donal Dempsey. Even now companies should be preparing for the opportunities that will be around when the economy starts to open up again. Are you preparing? 

Less than six months ago I wrote an article in Fleet Transport with Financial Planning the subject matter. In forecasting a slight/medium economic downturn post-Brexit (with an estimated 60,000 additional unemployed and a slowdown in growth), key ways a transport business can protect its current business and balance sheet value were outlined. At the time I suggested diversification in investments, stronger financial controls and a less optimistic/risk prone attitude to business. A bit like recommending that passengers check the emergency exits on a plane prior to departure but no need to be unduly alarmed!

All has changed and while many transport firms are now in the middle of crisis management and working through the new norms with both Government and bank help, this is not long term and the actions businesses take now are crucial in how the business will fair over the next 24 months. Back to the aviation theme, if the pilot of a light aircraft has to make an emergency landing, he/she has a 90% chance of getting out uninjured if the necessary analysis is undertaken, i.e., check out a suitable landing spot and of course, the skill to carry it off. In business terms that means you have met the crisis, looked at all options and took a decision based on reliable information and trust in your own ability.

In transport firms financial plans and best practices can now be learned and implemented and it’s always in a crisis that new ideas and better ways of functioning come to the fore. It’s interesting to note that An Post is now an essential service handling 1 million parcels per week. While commercial post is down but now it can offer incentives to SMEs to help them distribute goods nationwide. A crisis has brought its service back from the brink and now after 20 years of letting others take the business from under their noses, it realises the opportunities that were always there.

With the new working norms coming into place, employees, once their work environment is safe, are all willing to alter and improve work practices. As many staff are working remotely, the importance of all the IT spend poviding accurate data is now vitally important. Assistance is now available from Local Enterprise Boards through expert mentors who have experience of linking all data streams in businesses into functioning management tools. Having a business that has strong financial management in place means that customer and operational issues can be concentrated on, looking at the changing requirements in the marketplace and have the financial strength and margin data to make the right decisions.

If you fail to plan you plan to fail and this is never so true in this environment. I can guarantee that if the financial and transport management IT system is fine-tuned to a level that profitability and cash management in this crisis is not a worry the company can then be well positioned re new opportunities and/or ability to react to further change. Financial planning provides the data to make decisions, it shows in financial terms where the firm is going (based on current information). Business at any time is a risk taking exercise, now that risks are compounded never before is good planning systems required when opportunities and threats are facing businesses in the months ahead.