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There are many steps involved in buying a business or expanding your current business. This includes a business plan, resources, due diligence, pricing and income tax considerations. A critical part of the business plan is getting a financial forecast executed. A financial forecast is required by the bank or other financial lenders for consideration of a loan. This forecast determines how the business is expected to operate in the future years - normally the forecast will be 3 to 5 years forward.
When Simkover and Associates submit a financial forecast it will include, as a minimum, the balance sheet and income statement of the business for future years, as well as a list of assumptions that the chartered accountants used in order to come up with the forecasted numbers in those two statements.
Banks know that it is in the interest of the clients' company to forecast optimistically, so they will be on the lookout for any unrealistic aspects of the forecast. The bank or other financial lender will ask hard questions designed to pick holes in the assumptions used in the forecast.
When our chartered accountants are preparing a forecast for you to present to the bank, Simkover & Associates gets the numbers for each line item from the client, and then questions the client in a manner similar to what the bank would be doing. This process ensures that the final product will meet the bank's expectations in terms of realism and credibility of the numbers.
Simkover & Associates chartered accountants get very involved in the preparation of the listing of assumptions. Depending on the quality of the assumptions given to us by the client, Simkover & Associates will either touch them up or re-write them completely, with the objective of ending up with very thoroughly thought-out assumptions in the forecast. This will assure you as a client, and us as your advisor, that the bank will not have problems with those assumptions.
It is very important to recognize the interrelationships of different numbers in the forecast, and ensure that they tie together logically. Simkover and Associates are experts at knowing which numbers have to relate to others throughout the forecast. This expertise comes from our long history at preparing these forecasts, and especially from the experience our senior partner gained in the CFO position of a major corporation. This is because large corporations place great emphasis on forecasts and on the credibility of the forecasts' assumptions.
First impressions are everything and your Financial Forecast is the first thing the banks will see. Make the impact you WANT to make by having the professionals at Simkover and Associates help you with your Financial Forecast. Contact us today.