Predictive Analytics

In the last 10 years, the world has changed with artificial intelligence and automation becoming more important and prevalent in nearly all industries. When implemented along with appropriate training and guidance, automation can transform your data into a powerful tool that you can analyze as needed, rather than wait for a complicated IT report. Of course, there’s the dangerous voice saying “But we have always done it this way.” Embracing automation, artificial intelligence, and machine learning is the first step in revolutionizing your business and data analysis.

A prediction based on accumulated data

REVENUE FORECASTING

Revenue forecasting is a prediction about your income in a certain amount of time. Predictive analytics are based on data. Revenue forecasting can help you confidently decide to hire new personnel or spend the money on building skills in your current employees. It can help you navigate business plans for a month or a year.

Quantitative forecasting
When developing a revenue forecast, you begin with research. After partnering with G7 Tech Services, we will format your data architecture so that you can easily see the patterns and information your organization has gathered over the past year.

Consider the variables. Are there new products or services? What about significant personnel changes? Each variable is important, and when all the analytics are run and the data is combined, even small changes can have huge results. This intense data analysis is called quantitative forecasting. It is data-driven and objective.

Judgment forecasting

Of course, there is always a human element to any successful company. Judgment forecasting is part of the human element. Experiences and intuition can’t be quantified and they are certainly not objective. But these two things can not be dismissed either. Using both quantitative and judgment forecasting can result in a solid revenue forecast. Data analysis paired with keen discernment contributes to a well-founded budget, enhanced decision making, and thoughtful hiring.

Forecasts are predictions that can always change
Here in Texas, we check the forecast often; our weather is always changing. Remember that your revenue forecast is not something to stick in a file cabinet each year. It is a living document that you are continuously viewing, updating, and consulting.

Accurately track your budget

PAYROLL FORECASTING

Forecasting for human resources and payroll is just as important as other forecasting methods. HR forecasting involves understanding the human needs of your company. You’ll need to determine if you are growing your workforce or if it is a time of downsizing. Perhaps, a significant number of your workforce is nearing retirement. You’ll need to plan for succession.

Department awareness

Payroll forecasting helps to accurately track your budget. You’ll know exactly where the money is being funneled. In turn, this gives you the ability to make solid decisions regarding transfers, terminations, and new hires. Organization charts can help you define exactly where your human resources lie. Knowing each department helps you decide when to form separate departments or even combine certain roles.

Variable workforce expenses

When predicting your future workforce needs, you must think of the costs. It goes without saying, the more employees you have the more it will cost to pay them. But also think of the changing economy. Planning for increases in the cost of living and healthcare coverage is part of the equation, too.

You’ll need to think about pay raises, bonuses, and incentives, too. If you already have a procedure for awarding these, you can estimate the future payroll costs for each employee.

Smart Spending to Earn More

FORECASTING OPERATIONAL EXPENSES

The beauty of an operational expense forecast is the clear picture of the financial expenses it takes for your company to make money. We can help you better prepare for how much money you need to invest to turn a good profit.

It takes money to make money
An operational expense forecast takes into account the costs you need to run your business. Consider the constants: rent, insurance, software, membership dues, subscriptions, etc. Think of your fluctuating costs: electricity, supplies, water, payroll, inventory, etc. If you run an established business, you can use your accounting history to develop a basis for your forecast. If you are a start-up, you will need to do some research.

Historical data is very important
By looking at past years’ expenses to find patterns, those fluctuating costs become a bit more predictable. If your inventory cost has increased by 2% every year for the last few years, you can plan ahead for a 2% increase in the coming year. Another example: Your historical data shows the surge in utilities cost over the hot summer, so you have a baseline for predicting the cost for the coming year.

Insight into the future
The operational expense forecast also lets you know if you have enough left from the “needs” to run your business to afford the “wants”. You are able to make decisions about what “wants” you are ready to move forward with. Maybe you want to update your IT infrastructure. With a solid forecast based on your data, you will know if it is a possibility this year. That same forecast gives you an insight into your ability to provide raises or bonuses. The key to a reliable forecast is reliable data. With quality information, you can create a dependable prediction. And you will know just how much money it takes to make money.

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