Why Do You Need Financial Projection Templates?

A financial projection, in its simplest form, is a forecast of projected revenues and expenditures. The forecast will usually take internal or historical data into account and will provide a calculation of external market variables.

Financial forecasts use actual or projected financial data to predict the potential revenue and expenditures of your organization. They also provide multiple examples, so you can see how your profitability might be influenced by improvements to one aspect of your finances such as higher revenue or lower operating costs. 

It is critical to have reasonable financial forecasts integrated into your business plan in order to get the attention of possible investors. When you seek to forecast expenditures while attempting to predict how rapidly your company will expand, forecasts can be a tough process. However you can easily get a handle on the financial forecasts of your organization with a simple overview and advance planning.

What Are Financial Projections Used for?

Here are the major uses of Financial Projections for your business:

• Financial forecasts help you prepare your start-up budget once you start a company, determine when you should anticipate the business to become profitable, and set targets for attaining organizational objectives.
• If you're already in company, it will help you set targets and stay on track by making financial forecasts each year.
• Both start-ups and existing companies would require financial forecasts while pursuing external capital to persuade lenders and investors of the growth potential of the company.
• The financial stability of your company is of concern to banks or other financial institutions.This involves not only presenting them with current financial statements that detail current business results, but also where you can see the company's standing in the next years.
• It may seem hard for you to get investors or a bank loan, but you want to be able to map out your future growth and build budgets that will allow your business to develop and prosper.

In doing Financial Projections for your business, you can either use a Financial Projection Template to create projections from scratch or pull in information from previous projections you have. This template also provides testing procedures that can be included in your financial forecasts to verify the numbers to ensure that they are within acceptable ranges.

eFinancialModels offers a wide variety of Financial Projection Templates that can surely help you in properly and effectively projecting your finances, either for long or short term.

You should not put away the projection template you made and forget about them until you complete your financial forecasts. On a regular basis, compare your predictions to your actual financial statements to see how well the company meets your goals.Make the necessary changes to make them more realistic if the forecasts turn out to be positive or negative.