A Forecasting Day in the Life of a Manufacturing Company Financial Controller or Finance Director

In the fast-paced world of manufacturing, the Financial Controller (FC) or Finance Director (FD) plays a critical role in ensuring that the business remains both financially stable and operationally efficient. One of their most important tasks is forecasting, particularly financial forecasting, which can be at times a complex and multi-layered process.

At Clearview, we understand the challenges.  We’ve been there ourselves, which is why we’ve developed tools specifically designed to simplify this process. Our integrated financial forecasting software allows finance professionals to manage their data efficiently and produce reliable, integrated forecasts.

In this article, we’ll explore a day in the life of an FC or FD at forecasting time in a manufacturing business, showcasing how Clearview’s financial forecast software can help streamline the process.

Morning: Strategic Discussions with Leadership

Task 1: Meet with the Managing Director (MD)

The first task of the day is to meet with the MD to align on the goals and key business plans for the coming year. This is essential for shaping the financial forecast, as it gives a high-level overview of the company’s objectives.

Key questions an FD or FC can ask during this meeting include:

– Recruitment Needs: Is the company looking to recruit additional staff to meet production goals or make any redundancies?

– Maintenance and Capital Expenditures: Will any new equipment or fixed assets be needed to boost production capacity?

– Funding Requirements: Is there a need for external funding to support expansion or capital investments?

This meeting lays the groundwork for forecasting activities, providing the FC or FD with crucial inputs to develop an accurate financial projection using tools like Clearview’s financial projection software.

Task 2: Liaising with the Sales Team

The next step is to meet with the sales team to gather revenue forecasts. This could involve a line-by-line breakdown of customer or product sales or a more generalised percentage increase. In either case, accurate sales forecasting is crucial for any manufacturing business because it informs production, staffing, and supply chain decisions.

Here Clearview’s business finance planning tool can help financial leaders to integrate these revenue numbers into a broader financial projection, allowing them to predict cash flows and margins with confidence.

Mid-Morning: Coordinating with Operations and Production

Task 3: Gathering Direct Costs and Cost of Sales

For our manufacturing finance professional, the next step involves meeting with the operations team to gather data on direct costs and cost of sales. This includes everything from the cost of raw materials to labour expenses, both of which are critical for calculating gross margins.

With Clearview’s financial statement forecasting software, these numbers can be easily plugged into the forecast, allowing the finance team to focus on key insights rather than data manipulation.

Task 4: Reviewing Stock Levels, Write-Offs, and Damages

Inventory management is a key aspect of manufacturing. The FC or FD must assess stock levels, write-offs, and damages to ensure these are factored into the forecast. While this data is often estimated, it is important to include it in the financial forecast, as it helps build contingencies for unexpected expenses or losses.

Clearview’s financial forecasting tool offers a seamless way to integrate these variables into a forecast. By using a financial forecast template which is aligned with the needs of manufacturing company, you can ensure that these numbers are reflected accurately in the overall financial projection.

Early Afternoon: Analysing Overheads and Fixed Costs

Task 5: Reviewing Overheads and Fixed Costs

The FC or FD must now review the business’s overheads and fixed costs, such as rent, utilities, and insurance. It’s essential to identify any upcoming changes, such as rent increases or new machinery investments, which could impact the company’s financial health.

Clearview’s financial forecasting software allows you to quickly update these figures, ensuring that your forecast is always up-to-date. Whether you’re forecasting for a one-year or three-year period, having access to real-time data is crucial for producing accurate financial statements.

Mid-Afternoon: The Actual Forecasting Process

Task 6: Building the Integrated Financial Forecast

After gathering all the relevant data, the FC or FD can finally sit down to build the financial forecast. This includes:

– Profit & Loss (P&L) Forecast: Inputting revenue and expenses to project profitability.

– Balance Sheet Forecast: Estimating changes in assets, liabilities, and equity over the forecasting period.

– Cash Flow Forecast: Translating the P&L and balance sheet projections into a cash flow forecast. Clearview does this major part for you.

Creating an integrated forecast can be challenging, especially when using traditional Excel spreadsheets. Errors in formulas or incorrect data entry can lead to significant inaccuracies. However, with Clearview’s financial projection software, you can automate much of the manual work.

End of Day: Presenting the Forecast

Task 7 Reviewing the Forecast with Stakeholders

Once the forecast is complete, now it’s time to present it to the Managing Director and other key stakeholders! This is where all the hard work pays off. With an accurate and comprehensive forecast, the leadership team can make informed decisions about future investments, staffing, and expansion.

A well-constructed forecast will help answer critical questions such as:

– Is the business capable of sustaining itself as a going concern?

– Do we have enough liquidity to support our growth plans?

Clearview can provide detailed insights into the company’s ability to remain solvent and grow. This is particularly useful during year-end reporting and during the forecasting period.

Importance of Forecasting in Manufacturing

There are two key reasons why integrated financial forecasting is crucial for manufacturing businesses, especially larger organisations:

1. Strategic Planning and Year-End Reporting: Accurate forecasts allow the business to plan for the upcoming year and report to the board with confidence.
2. Going Concern Assessments: Post-audit, businesses need to provide a going concern forecast, demonstrating their ability to operate for at least 12-24 months without financial difficulty.

Using Clearview’s business finance software, companies can easily generate these forecasts, ensuring they remain compliant and financially sound. Getting excel workings to run through multiple reports can be very tricky and it only takes one formula to be out and the integrity of the whole thing can be questioned. Because we’re founded by qualified and experienced accountants, you can be confident that by using Clearview, the accounting entries are done correctly in the background. It might even free enough time up to grab a cuppa!

A day in the life of a Finance Director in the manufacturing sector can be both challenging and rewarding. Forecasting in manufacturing is a demanding and detailed process, requiring input from across the business.

By automating many of the manual processes involved in forecasting, Clearview helps finance leaders focus on what truly matters—driving growth and ensuring the company’s financial health.

Clearview can empower Financial Controllers and Finance Directors to focus on strategy, improve financial planning, and ensure that their businesses are set up for success in the years to come.

Sign up for Clearview for FREE today to start saving time on accurate forecasting!