In the past accountants have tried in vain to budget at an ever more detailed level to somehow see into the future. It was and is now still a pointless exercise. We need to acknowledge that it will be wrong so let’s get it wrong quicker! Albeit as close as possible to the future actuals. In planning, many processes are carried out, year-in and year-out, because they were done last year. All the previous ‘givens’ associated with forecasting should be challenged and all the inefficient processes abandoned as Peter Drucker preached. Just as a house is built on a solid foundation, forecasting financial numbers should be built on best practice ‘foundation stones’. Forecasting at a category level rather than at account code level Forecasting at a detailed level does not lead to a better prediction of the future. A forecast is rarely right. Looking at detail does not help you see the future better. In fact, I would argue that it screens you from the obvious.

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