One of the biggest struggles faced by small businesses is adequately planning for the future. It's imperative to operations for the company to understand their projected expenses and earnings as well as adequately prepare for unforeseen events, and financial forecasts are an important part of achieving these tasks. To help you understand the value of the service, the accountants at Gillette & Associates LLC CPA in La Crosse, WI, outline the procedure and how it can serve your business.

Accountants Explain the Importance of Financial Forecasting for Small Businesses

1. Measuring Progress

To create your forecast, your accountant will study your previous financial documents to predict your company's profits and expenses for the year. Throughout the year, you'll be able to compare your up-to-date financial statements to the prediction for the current quarter. This process will help you identify potential issues or areas of improvement as you go so you can avoid dangerous problems down the road.

2. Controlling Cash Flow

Cash flow guides many of your business's decisions because you need liquid assets to cover costs, make investments, and operate on a daily basis. If you can't control or maintain a positive flow of money coming into the company, it can harm your business and even put it at risk for closure. Fortunately, your team can use your financial forecast to properly budget for both planned and surprise expenses so you're never forced to halt progress or miss out on opportunities as a result of little or no cash flow.

3. Planning for the Future

Your forecast can also help you plan for the future in a variety of ways. First, you assess your predicted gains and decide if you can make new investments to encourage the continued growth of your business. Secondly, you can use the document to estimate your tax liability. By working your certified public accountant, you can identify potential ways to reduce your liability ahead of time.

Get your financial forecast today by contacting Gillette & Associates LLC CPA. The firm offers a variety of business consulting and accounting services to meet the needs of La Crosse County companies. Speak with a qualified accountant by calling (608) 784-8355, and learn more about their financial forecasting service on their website.