8 Guidelines For Financial Forecasting During COVID-19
Guest Writer: Holly Tate — Vice President of Business Development at Vanderbloemen Search Group
During this time of financial uncertainty, I interviewed Sutton Turner, our Chief Operating Officer on ways to approach financial forecasting during COVID-19. Sutton shared tangible strategies to effectively assess and execute a financial forecast in your organization despite the many unknowns we’re facing.
General Guidelines Going Forward In The Process Of Financial Forecasting Are:
1. Recognize the importance and benefit of financial forecasting. Although you may not know exactly what the future holds, you can use this time and the data you have from giving, donations, tuition, revenue, and other means to forecast your future financially.
2. Sit down with people who track economic trends. Having added input and counsel will help you ensure a high level of thoroughness and accuracy in your planning. These events are unprecedented, so sitting down with experts who have been tracking the economic trends will help you make more informed decisions.
3. Formulate a detailed spreadsheet. Begin the forecast date range from now through the month you believe you’ll be able to return to some type of stability. If you’re not sure, start with August. As you’re creating your spreadsheet, consider how the economic climate will impact your forecast. Again, bring in trusted advisors who can help you project as we learn new information.
4. Compare monthly revenue number to your current expenses. Get an accurate account of your payroll, mortgage, rent, ministry expenses and any other expenses. This will help you examine if how your revenue compares to your expenses and how to move forward in your planning. This step will help you determine if you need to make cuts.
5. Decide how much money will be consumed to offset your revenue during those months. Making this type of leadership decision will help you clearly outline your expenses. This also allows you to more clearly determine the expenses you may need to cut and how long they need to be cut. Ask for wisdom and prayer from your leadership team on the expenses you could do without for a few months.
6. Measure your new expense number and take into account your new revenue target. Once things begin to stabilize and get back to a sense of normalcy, examine what those numbers have looked like in the past from month-to-month through August or whichever month makes sense for your organization.
7. Conclude what it looks like to re-program and re-forecast your revenue and what it looks like to resize your staff. If you make decisions to cut resources or reduce your staff, be sure to account for those changes in your forecasting. Consider when you might start rebuilding the resources you’re temporarily cutting.
8. Write down and refocus on your organization’s mission. Your mission is the lens by which everything your organization does is measured. Refocus around your vision to ensure that your organization is making financial decisions that reflect your mission.
As challenging as financially forecasting during COVID-19 can be, it’s wise to start. It can positively benefit your organization as you look forward to the future. Assessing the data, details, and mission of your organization can serve as a reminder of why God has called you to the very role you are in within your organization.