Connection

The Official Blog of Forecast5 Analytics

Jody Smith
WRITTEN BY
Jody Smith

Budget, Municipalities, Forecasting, 5Cast

Looking Forward to a Multiyear Financial Forecast

Posted on Jan 3, 2018 8:21:24 AM

Executing a multiyear financial projection can be a time consuming and complicated process, especially if you are starting the process for the first time.  However, city officials approaching this type of project with a strategic perspective will understand a financial projection is more than just a spreadsheet.

A meaningful multiyear financial forecast can produce tremendous value for a community - beyond the tables, charts, and graphs that are generated as output.  The primary benefits of using a multiyear financial forecast include

  • Strategic alignment of resources with long range goals/plans
  • Measurement of historical performance
  • Communication of challenges and opportunities

Strategic Alignment of Resources with Long Range Goals/Plans

The process of developing a multiyear forecast requires time and resources - the first critical step being the collection of information and input from a wide range of sources. A projection of this nature cannot be done properly without communication throughout the organization. The ensuing collaboration between city personnel, elected officials and outside parties fosters a better understanding of the end- product, allowing a valuable perspective to be incorporated into the forecast…and increasing the level of buy-in for a finalized plan.

Measurement of Historical Performance

Many times, the process of looking forward can be enhanced by looking backward. Using historical data to inform future assumptions can be valuable. More so, historical review provides an opportunity to examine performance of budget versus actuals.

Learn more, read: Budgeting - You Can't Look Forward Without Looking Back

Communication of Challenges and Opportunities

Local governments routinely face an increasing range and level of expectations, while past and expected federal and state actions constrain financial resources and options.  In effect, city officials are asked to "produce more with less” while making those decisions with 20/20 foresight.  A well-constructed financial projection can facilitate deeper understanding and communication with stakeholders around organizational challenges and opportunities.

When you look at a multiyear forecast as more than a spreadsheet, and move to the next level of viewing it as a process and an instrument for continual improvement, your community will enjoy numerous tangible and intangible benefits.



Click here to master the five-year financial projection.

Build multi-year financial projections

 __________________________________________________________________

Jody Smith is a Senior Account Advisor for the Municipality market with Forecast5 Analytics. Jody has been involved with local government for more than 38 years. He has served as Deputy City Manager and Director of Finance for the City of West Des Moines, served as a member of the ICAP Board of Directors, and is Chairman of Community Relations for West Des Moines Water Works. He received a Bachelors in Politico-Economic Systems and History from Buena Vista University and an Associates Degree in History from Iowa Lakes Community College.

Post a Comment

From the learning center

Clarkston School District Accesses Entire Forecast5 Product Suite for Enhanced Decision Making

Clarkston School District Accesses Entire Forecast5 Product Suite for Enhanced Decision Making

Washington district gains a historical perspective on key areas and leverages budgeting & forecasting tools to meet WA reporting mandates.

Download Now
5Cast™ Plus Projects Wylie ISD's FY18 Payroll Costs with 99.98% Prediction Accuracy

5Cast™ Plus Projects Wylie ISD's FY18 Payroll Costs with 99.98% Prediction Accuracy

This Texas district CFO used monthly reporting tool, 5Cast™ Plus to accurately project and predict closing year end payroll costs. 

Download Now
Sycamore School District and Board Reverse Deficit Spending and Obtain a Balanced Budget Using Forecasting Model

Sycamore School District and Board Reverse Deficit Spending and Obtain a Balanced Budget Using Forecasting Model

Jim Dombek, District 427 Board President and Nicole Stuckert, CFO/CSBO use forecasting tool, 5Cast™ to formulate a three-year deficit reduction plan designed to bring about a balanced budget.

Download Now
Sycamore School District & Board Reverse Deficit Spending and Obtain a Balanced Budget

Sycamore School District & Board Reverse Deficit Spending and Obtain a Balanced Budget

Jim Dombek, District 427 Board President and Nicole Stuckert, CFO/CSBO use forecasting tool, 5Cast™ to formulate a three-year deficit reduction plan designed to bring about a balanced budget.


Watch Now