1929-1930 This is what a depression looks like – and we are not in one in 2020.
“If you fail to plan, you are planning to fail!” Benjamin Franklin
Don’t be depressed about recession. While media headlines announce Britain’s worst recession for many years, accountants know that a recession’s graph is only the short, sharp dip that the UK government forecast back in March at the start of the COVID pandemic. And a significant uptick in June’s GDP is further encouragement.
If you want the dictionary definition of recession: “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.” I don’t know about your business—but mine suffers from a six-month drop in earnings about every five years. Depressions are more serious, longer term—and we are not suffering from one.
Forecast5 has been developed to prevent wrong turns and mistakes becoming disasters and depressions. In an uncertain environment all managers are asking “What if…?” What if our supply lines are disrupted? What if we lose staff to COVID? What if our customer base disappears?
How are your figures affected?
For most businesses, the answer to the first two questions is “So far, so good, no unmanageable interruptions.” And “Most of our staff like working from home and some are even being more effective.” They are, of course, staying safe, the term that has replaced “Have a good day” in most people’s correspondence.
Good businesses succeed. Good businesses plan, compare plans with results, adjust, reforecast and move forward. Forecast 5 was developed with just these managers and businesses in mind. It replaces out-dated copy ‘n paste spreadsheets, permitting updates to move across the various financial headings and allowing rolling forecasts, so that this end-of-month data translate into the next month’s plan.
Forecast 5’s most recent innovation is the Daily Cashflow forecasting feature. When times are tough, keeping control of the cash is vital, as all managers know, either instinctively or to their cost. If you can pay the bills you can stay in business and knowing, not just what is in the bank but what is expected to come in when, is vital. If a customer doesn’t pay on time, what impact will this have on the rest of the business? Will it disrupt supplies, delay salaries, invite late-payment penalties?
Managing the future
Forecast5 software works together with the Daily Cashflow predictions. Update the main data and the changes flow through the entire company forecast, providing management with an accurate view of where the business is going, so critical in uncertain times. Find out how effective it is for yourself with our 21 day free trial.
And the times are uncertain, not desperate. Our new world is hiding fresh directions so vast they will dwarf the world’s longest bull market because changes in direction throw up new and unexpected opportunities. In his best selling book Outliers, Malcolm Gladwell interviews Bill Gates, who says that unique access to a computer at a time when they were not commonplace helped him succeed. As our lifestyles continue to adapt to a post-COVID world, we will develop interest in—and spend money on—new products, skills and activities and some of these will make the developers very rich indeed.
Credit for Featured Image – UK Office for National Statistics