Missed Monthly Projections: Shaping Forecasts for a Sustainable Future

September 9, 2019  |  By Phoenix Management  |  2 Minute Read

In continuation of our “First Call” blog series, we next discuss how to respond when monthly projections are missed.

You have reached the end of the month and are reviewing your numbers with your controller when you learn you have missed your monthly forecast. Your first recourse is likely to brainstorm causality, looking for a way to write off missed projections as a mere blip rather than a harbinger of more challenging times ahead. Next, you consider the implications for your organization and its lenders. Is long-term trouble ahead? Do you need to make changes to your strategic plan or organizational structure?

While missed monthly projections are a point of stress, a single month’s miscalculation does not necessarily mean that rough seas are ahead. It does, however, mean action is required to manage the consequences and keep them at bay.

At this point, there are a number of approaches you can take as you head into the next month.

1. Push Through the Issue

The ideal—and easiest—course of action is to identify the root cause of the issue as a one-off instance that won’t impact future projections and move forward. Whether you believe you failed to reach a quota because of lagging activity of one of your larger clients or the holiday season, you choose to dismiss the cause as an external event beyond control. However, it is important to consider the situation objectively, affirming that the problem truly rested in an outside factor, rather than a conglomeration of events within your control, before selecting a scapegoat that is not fully to blame. Even in the case that an external factor is the culprit, it is also critical to ensure that your organization is better able to anticipate these nuances when forecasting.

2. Take Strategic Action

If not linked to an external event, the missed projections likely stem from an ineffective aspect of your internal strategy. When this is the case, you may make immediate, strategic changes to your sales process or go-to-market approach in order improve results before the next month’s projections are missed. But before reacting quickly, it is imperative to ensure changes are not impulsive. First, you must understand the potentially wide-sweeping flaws in your organization and the ramifications of change. To make long-term, positive change, business leaders must pinpoint the right weaknesses and come to accurate conclusions about the cost of action and how to rectify the situation at hand.

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3. Reevaluate Future Forecasts

There is also the option to examine your failed projections and make changes for next month’s forecast to identify a more realistic baseline for what is likely to happen. Careful consideration of past and future projections will help business leaders account for external and internal factors that impact revenue and require strategic change. Such an analysis includes evaluating the business’ vital signs and baseline forecast, accounting for external factors that are outside of the business’ control, identifying areas where strategic decisions are needed internally, and making sure the forecast aligns with reality over time.

Financial Forecasting from Phoenix

The expectation to maintain accurate and realistic projections from month to month is a daunting yet necessary task, and Phoenix professionals are available to approach your operational, financial, and managerial challenges for you. We provide the expertise needed to implement sustainable change and forecast realistic projections from an objective standpoint.

By applying over 30 years of turnaround experience to each and every complex situation our clients face, we are well versed in evaluating both external and internal factors and able to come up with a realistic forecast and solid foundation for your unique organization. Contact Phoenix to learn more about how our professionals can apply their expertise to your unique business situations today.

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