In the nonprofit world, the annual budget has been a time-honored tradition for decades. Because of this, many nonprofits find it difficult to consider updating their budget practices to include rolling forecasting, even though the potential benefits of doing so can be great.

As any nonprofit CFO knows, especially after going through the 2008 recession, nonprofit finances can be hit extremely hard (or, conversely, receive a sudden burst of support) due to external economic events. This may happen suddenly, having a drastic effect on the budget that finance leaders drew up so carefully – essentially rendering it totally out-of-date.

Nonprofits can live or die by their cash flow situations, so it’s vital that CFOs and the rest of the executive team maintain a clear, current picture of their organization’s finances. Forecasting can help make this a reality.

Here are just a few of the benefits that implementing forecasting can offer your nonprofit.

Gain a better understanding of your cash flow

One of the most important elements of a nonprofit’s success is its cash flow. Without a solid grasp on how much cash will be coming in and going out, the rest of the organization can’t effectively plan its programs. This can force the entire nonprofit into a frustrating period of “waiting and seeing.”

When organizations are reliant on an annual budget, it can be difficult to get a good idea of where the nonprofit stands on a month-to-month or, as is sometimes necessary, week-to-week basis. This hinders an organization’s ability to maintain agility – something many nonprofits struggle with in the first place.

Implementing a cash flow forecasting model, using a forecasting solution that allows users to view the numbers in real time can be a big step forward in improving a nonprofit’s cash management abilities.

Simplify the approvals process and make data more transparent

Budgets often need the approval of not just the CFO and CEO, but the board of directors, as well. This can lead to a lengthy and confusing approvals process, with multiple people requesting changes or updates.

This, in turn, can not only add time to the entire budget cycle, but it can also lead to questions about where certain numbers came from.

True Sky addresses both of these issues. By simplifying the workflow process, True Sky enables easy collaboration among users. CFOs can easily view who’s seen the budget, who’s signed off, and who still needs to review, as well as see who’s made changes or edits.

In addition, users can include comments and attachments to their data entries, providing context for the numbers. If a board member requested a certain number be changed, the explanation for why can be attached directly to the number in question. This means answering a lot fewer questions and reducing the amount of back-and-forth related to the budget process.

Allow for more insightful, more frequent reporting

When you’re working with a forecasting solution that gives you real-time insight into your nonprofit’s finances, your information is naturally more accurate and up-to-date.

This, in turn, affects your reporting – instead of having to wait until the end of the month for a report to offer much useful information, you can pull a report at any point and gain actionable insight from it.

It helps, of course, if your forecasting solution offers easy, intuitive reporting functionality, which True Sky does. The system was designed to allow for on-demand reports of almost any kind imaginable. This way, you can keep a closer eye on your nonprofit’s finances, helping your organization to plan more strategically.

Want to learn more about True Sky’s features? Check out our video library for an overview, demos, and more.