Forecasting entails analyzing historical data to identify trends, and utilizing these insights to predict future outcomes. There are many types of forecast including sales, cost of goods sold, gross profit, headcount, salaries, expenses, capital expenditure, net working capital and debt & interest.Organizations that undertake forecasting stand to gain many benefits:

1. Informed Decision Making - Forecasting provides a framework for informed decision-making based on data rather than just guesswork. This often leads to improved cash flow and profitability.

2. Proactive business management & improved risk management - As part of the forecasting process, businesses can predict multiple scenarios and proactively develop strategies to capitalize on opportunities and mitigate threats.

3. Optimize resource allocation & increased efficiency - Forecasting facilitates optimal resource allocation, including staffing , inventory and fixed assets, to ensure efficient operations and waste reduction.

4. Enhanced competitive edge - Businesses that accurately forecast the future are better positioned to proactively adapt to an ever changing landscape, which provides them with a competitive edge.

Below are the drivers of some key types of forecasts along with a checklist of the information needed to complete each forecast: