Video 4 - Forecasting revenue

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來自 Fundação Instituto de Administração 的課程

Budgeting essentials and development

28 個評分

Fundação Instituto de Administração

Budgeting essentials and development

28 個評分

The Budgeting Essentials and Development course focus on an integrative and practical view of concepts, methods, and techniques to develop a budget. After finishing this course, learners will be able to: - Develop the budget with a broad view of the corporate functions; - Integrate the strategic guidelines into the discussions of budgeting process; - Structure the budget planning and development in a logical sequence - Coordinate the project of budget planning with the different areas of the company - Actively promote assumptions discussions to improve the process of developing the budget - Apply financial concepts to support the budget planning process - Design a budget monitoring and control model to support the performance management - Evaluate the performance of the company by managing the results and the budget In this course, learners will have a deeper understanding of the budgeting process, its challenges, common issues, and approaches to mitigate the problems and improve the learning curve of budget planning. It is integrative by emphasizing the transition between the corporate strategy and the budget. It is practical by following a structured process of going through a framework that illustrates and demonstrates how to analyze, develop and control the budget.

從本節課中

Module 3.1 - The company operations and the Budget

In this module, the discussion goes through a step-by-step framework to support the budget development. Each of the steps represents a relevant component of the budget, and the links between the budget of each area of the company are discussed. The integration of the different area's budget is one of the primary objectives of this module, which will lead learners to an integrative view of the budget development. And this integration is the key learning objective of the module.

Video 1 - A framework to structure budgeting - The revenue budget2:50

Video 2 - Structuring revenue by product lines4:13

Video 3 - Structuring revenue by contracts and territories3:28

Video 4 - Forecasting revenue3:55

Video 5 - Major issues on revenue forecasting5:08

與講師見面

Alberto Sansiviero Jr.
MBA
FIA Futures Studies Program
Samantha Mazzero
MSc, MBA, BS Math
FIA Profuturo – Futures Studies Program
Nelson Yoshida
Ph.D., MBA, B.Eng.
FIA Profuturo – Futures Studies Program
Roberto Dumas Damas
M.Sc., CFA
FIA Profuturo - Futures Studies Program
Fernando Fleury
Ph.D.
FIA Profuturo - Futures Studies Program

[SOUND] Hi,

good to see

you again.

In the last three videos, we discussed the approach to structured revenue budget.

And we mentioned one of the major challenges in revenue budget,

which is the forecasting.

There are many definitions of forecasting,

we include some of them in the reading materials.

Basically, the idea of forecasting is to estimate the quantitative state of

variables in the future with bases on historical data and estimation of trends.

In our case, the variable is the revenue related to products,

services, and contracts.

Whenever we analyze the future state of a variable, we're dealing with uncertainty.

The future is unpredictable.

Let's make no mistakes.

And yet, we must estimate revenues to support the budgeting process.

Let's not forget, many other areas of the company rely on revenue budget.

Let's look again the example we provided before with revenues byproduct lines.

In the example, the sales forecasting unit shows an increase in units sold for

all product lines.

In the role of budgeting analyst we should talk to sales people,

they can contribute in the estimation of how many units we forecast to sell.

Keep in mind, though, that sales people may have some bias in the information

due to the incentive system they are following.

Anyway, they are a very good source of information

to make the sales forecast more accurate.

Note also a price increase in product 1,

which includes every quarter, this could be due to an expected

increase in the mix of raw materials that compose the product 1,

or it might come from the strategic decision to reposition the product.

For example, by adding more features to slowly

move up the product towards a premium positioning.

For product 2, we can see it has a price increasing at the second half of the year,

and product 3 doesn't have any price increase.

As we mentioned before, the example also includes a sales discount line for

the products.

They may be based on volume ranges or

the consequence of a product substitution program to happen in the next year.

Anyway, the message here is always look for the assumptions and try

to understand them, you either use them as they are or might need to review them.

Well, in a nutshell, what we've been discussing so

far is about assessing assumptions to support forecasting.

Some of the assumptions are under our control, most of them are not,

and uncertainties come from those which are not.

The strategy analysis process includes analyzing uncertainties, so

there may be strategic guidelines to support revenue budgeting.

For example, guidelines about economic growth, the level of competitive rivalry,

technological evolution, and changes in societal patterns.

Maybe you have participated in the strategy analysis, maybe you have not.

What is important is revenue forecasting has a lot to do with strategy.

Look for the strategic guidelines.

You benefit from a good knowledge on strategic guidelines

because the budget should follow them.

Well, let's conclude revenue forecasting in the next video.

See you soon.

[SOUND]

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