Four Ways Catalyst Makes Forecasting More Efficient
Forecasting has been a hot topic lately as companies try to recover from the COVID-19 crisis. Ask just about any CFO, and getting a tighter handle on their working capital has likely been priority #1 over the past few months. Companies are facing a myriad of issues that complicate the situation greatly, whether it’s slowed sales, inventory issues or diminished capacity. It is apparent that tight forecasting is a necessity.
To make matters even more complex, epidemiologists have been projecting a powerful second wave of the virus may be on the way this fall. Rising COVID-19 diagnosis rates for many states in recent days would seem to confirm it is just a matter of time before we see a major outbreak again.
The prevailing thinking now is that a W-shaped recovery is the most likely scenario for the economy. We’re on the way up now, but a second drop is on the way.
Many companies were unprepared the first time around. The question is, how many took a “band-aid” approach to temporarily stop the bleeding and how many enacted permanent changes to incorporate tighter forecasting and working capital management into their everyday operation?
Many companies continue to struggle mightily when it comes to creating reliable forecasting. Depending on your approach, the process can be messy, labor intensive and inefficient. Often, it involves trying to gather and merge multiple Excel spreadsheets, and the tedious tasks of maintaining multiple versions and ensuring data accuracy. There is a better way.
Our Catalyst Software offers a very easy set of forecasting tools that reduce most of our clients’ cycle times by 50% or more, and net them far more accurate rolling forecasts at the end of the day. It’s a cloud-based tool set that was created by finance professionals, specifically to alleviate many of the common pain points of forecasting.
So, with that said, here are 4 ways Catalyst can make your forecasting more efficient.
Better Collaboration, Less Legwork
By engaging the team in bottom-up planning directly in Catalyst, you’re getting the latest intel from the boots on the ground. Not only is this going to get you better information, this one is also going to save you a lot of legwork.
With Catalyst, your sales team can be entering their monthly projections right into the tool. No more need to merge multiple spreadsheets – it’s all done right there in the tool. You get their input directly and bypass the heaviest, messiest legwork of the forecasting process. There are also no incremental fees for extra user licenses, so your entire team can all be using the tool, no matter the size. If they can use Excel, they’ll be more than comfortable in Catalyst.
Improved Demand Planning
Another great advantage of having unlimited user licenses is that many departments can benefit from the visibility of real time rolling forecasts. For example, if you’re planning by SKU, operations and procurement can be using those forecasts to tighten up demand planning.
Catalyst offers the great advantage of being a real-time single source of truth that’s always easily accessible via the cloud. That means nothing gets lost in translation and the latest, most relevant information is always available.
Forecast at Any Level of Detail
Catalyst also allows users to build their forecast at any level in the P&L, giving you and your team a great deal of flexibility on how detailed you want to get. Your team can be forecasting by SKU, by customer, by dollars, or by a product line with several SKUs rolled up underneath. It all depends on how detailed you want to get.
When you engage in this higher-level planning, Catalyst can automatically force the dollars back down into a SKU-by-SKU, customer-by-customer forecast for you, so you can see if your plans are grounded in something reasonable, or if further adjustments are required.
Create A Feedback Loop
Catalyst gives you many options to ensure forecasting at any level of detail is an approachable and repeatable monthly process. By engaging your team in this forecasting process on an ongoing basis, you begin to create a feedback loop, where you are constantly seeing forecasting and then results. This is perhaps one of the most powerful benefits of Catalyst.
We’ve noticed over and over again, that the accuracy of our client’s forecasting improves dramatically over time as they begin to gain a better understanding of what is happening within the business. And in a time like this, that’s more essential than ever.
What forecasting challenges is your business currently facing? Has the COVID-19 pandemic changed your approach to forecasting? We’d love to hear what you have to say. Sound off on social media now and join the conversation.