The Truth about Accounting Packages and Projections

Dec 31, 2019 by Roger Scherping

I recently read this article at The BluePrint. I like it because it nicely explains how a financial projection is done, and because it correctly points out that the most popular small business accounting packages like QuickBooks simply can’t help you do a financial projection. They’re just not made for that. This is the need that ProjectionSmart meets so nicely.

The article explains that large companies have big finance staffs and expensive ERP programs that have everything they need to produce great financial projections. But before ProjectionSmart there was simply nothing out there for the small business owner to do their own financial projections. Software programs like QuickBooks will give you a lot of the data that you need to do a projection, but after that you’re on your own. You have to figure out how to turn that data into a projection. Most small business owners don’t have an accounting background, and they simply don’t want to spend their time learning accounting or creating spreadsheets.

That’s why we created ProjectionSmart. Remember that ProjectionSmart is targeted at the small business owner who doesn’t have an accounting background or a controller to do a financial projection for them. We give the small business owner the tools they need to look ahead and understand what their business’s financial future looks like.


ProjectionSmart Elegantly Meets the Need

The article explains that there are three financial statements required for a financial projection: balance sheet, income statement, and cash-flow statement – all of which ProjectionSmart helps you develop in an impressive form that’s ready for bankers and investors.

The article also says that both new and existing businesses need financial projections, and that’s why we created Startup (for new businesses) and Growth (for existing businesses). At ProjectionSmart we’re all about making it easy for the small business owner, so rather than a one-size-fits-all model, we adapted our tools for the specific situation.

But here’s where I disagree with the article: “You’ll likely be using a template to prepare your projections.” That was always true in the past. I’ve talked to SCORE (Service Corp of Retired Executives), the Small Business Administration, business coaches, bankers, accountants, and others, and that’s what they will all tell you. They all say they’ve got a spreadsheet for you to fill out to create your projections. Well, I’m a CPA, and honestly some of those spreadsheets are so complicated that even I couldn’t follow them. I can only imagine how frustrated the typical small business owner would get trying to use them.

ProjectionSmart renders obsolete the ubiquitous spreadsheets that all of the financial experts recommend. No more learning to understand a complicated spreadsheet or struggling to interpret the results it gives you. ProjectionSmart speaks your language and just asks you questions about your business that you as a small business owner can answer because it’s your business! You know what’s going on with your business, and you just have to tell that to ProjectionSmart. Along the way we give you lots of hints to understand what we’re asking and what the results mean.

A couple of more things. ProjectionSmart is completely interactive. Go through the program once putting in your best guesses, and then study the results. If the results tell you that you need to make some changes (like adjusting prices or cutting expenses), then go back in and adjust your inputs. ProjectionSmart will immediately give you an updated projection. This means that you can immediately see how your changes will impact your projected financial results.

And ProjectionSmart gives you the chance to model three different scenarios. Maybe you want to model conservative, aggressive, and best-guess scenarios to see how each one plays out. Or maybe you want to model a baseline scenario and then one or two scenarios involving an expansion or an acquisition. All of that future planning can be done quickly and simply with ProjectionSmart.


Why Do Financial Projections

The article also lists these reasons for doing financial projections, and ProjectionSmart is designed to meet all of them:

  • You’re creating a business plan: Business planning has always been greeted with about as much enthusiasm as a trip to the dentist. The Proof Plan was created to make writing a business plan simpler because it focuses on just the three issues that bankers and investors care the most about: finances, customers, and your team. And ProjectionSmart is the easiest way to do the financial projections that go into your business plan. Together the Proof Plan and ProjectionSmart make business planning simpler.
 
  • You’re hoping to attract investors or applying for a loan or line of credit: Impressing investors or bankers is also made easier with ProjectionSmart. At a recent workshop with entrepreneurs and small business owners, I demonstrated how ProjectionSmart produces a full set of professional-quality financial statements – balance sheet, income statement, and cash-flow statement. I asked a banker in the audience how often a potential borrower comes to him with a complete projection like that, and he responded, “Never.”
 
  • You want to get a better handle on your business:  At ProjectionSmart, we’re all about helping you get control of your business. If you’re not growing, seeking investors, or applying for a bank loan, you still need to know where your business is going. In fact, we like to say, “Business planning isn’t something you do once. It’s something you do once a month.” A new company can use Startup to create a financial plan for its first year so they can measure their progress every month, and an existing business can use Growth every month to keep looking 12 months ahead to anticipate problems long before they happen. With ProjectionSmart, you’ll make sure you’re running your business and that your business isn’t running you.

ProjectionSmart is the Solution

ProjectionSmart has eliminated the need to use a template or a spreadsheet when you need a financial projection. It’s written for the small business owner who doesn’t have an accounting background. And using ProjectionSmart will help the small business owner understand their numbers and keep control of their business.

Visit us and register for Startup (new business) or Growth (existing business). Use it for free and see how easy it is to use. If you have any questions or comments, email me. I’d love to hear from you.