"Rise Above The Numbers" by FP&HEY

Do you dread forecasting because you’re never 100% right?

We’ve done hundreds of revenue and profit forecasts.

And guess what?

Every single one of them was wrong—and that’s ok when handled properly.

Although it is a huge mental hurdle to get over.

We’ll talk about one of our biggest forecasting fails.

Double-counting a revenue figure in a public company’s internal profit forecast.

Tune in to find out how we made the mistake, how we communicated the mistake to leadership, and how we handled it which drove revenue results higher (seriously).

Show Notes

* 00:18 - We aint perfect in FP&A—let’s talk about epic forecast fails

* 00:42 - Forecasting fails are a right of passage in FP&A

* 01:28 - Holy smokes, Drew messed up a public company’s forecast 🙈

* 02:59 - Great monthly forecasting processes help catch and mitigate mistakes

* 03:45 - Making mistakes is stressful—respond by taking action

* 04:50 - You learn who people are when their backs are against the wall

* 06:30 - The reality is, numbers will be a measure of your FP&A job success

* 07:53 - Forecasting is about the realm of possibility—not perfection

* 08:44 - Drive operational finance—help your business partners make decisions

* 10:15 - FP&A is about driving decisions to help your company achieve its goals

Know Why the Mistake Happened

Making mistakes is ok.

Try not to make the same mistake twice.

Our revenue forecast mistake happened because two people counted the same product in their own stand-alone forecast.

The fix?

Each month audit what products each forecaster owns, ensure ZERO double counts.

🔥TIP: Speaking of products, use that product data to do whitespace analysis.

Hustle to Communicate and Create a Plan

Knowing why a mistake happened and ensuring it doesn’t happen again is a good start.

But what can you do about it now to help the company still achieve its goals?

Go on defense by managing expenses to help profit and cash flow hit desired levels.

Or go on offense and see what untapped revenue opportunities exist (like we did).

Either way, try to have a contingency plan in place when you communicate your forecast mistake.

Manage Future Mistakes the Same Way

We aren’t perfect.

Things you can’t predict will come up.

And mistakes will inevitably be made.

Focus on having a:

✔️ Framework

✔️ Team

✔️ Process

To help keep financial and nonfinancial KPIs (and metrics) organized throughout your forecasting journey.

That will help you maintain focus not on accuracy, but the realm of what’s possible.

And give your leadership and key stakeholders confidence that you will help them navigate their financial performance with financial rigor in place.

Conclusion: Keep Learning

You will grow from your successes and failures.

The trick is to keep learning—every day.

Knowledge is power.

Resources

▪️ Follow us on LinkedIn: https://www.linkedin.com/company/fpandhey

▪️ Email us your burning FP&A questions at info [at] fpandhey.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fpandhey.substack.com

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fpandhey.substack.com