Comments on: David Carter's guide to forecasting: avoid http://www.accmanpro.com/2008/09/19/david-carters-guide-to-forecasting-avoid/ Thu, 09 Feb 2012 10:01:51 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: alastair http://www.accmanpro.com/2008/09/19/david-carters-guide-to-forecasting-avoid/comment-page-1/#comment-5104 alastair Fri, 19 Sep 2008 10:49:58 +0000 http://www.accmanpro.com/?p=3319#comment-5104 I have always characterised budgeting as what you expect to happen in the short term, and forecasting as what you would like to happen over the longer term. Although this gets muddied when people use them as motivational toys. I agree with your statement "Excel should never ever be used for this work". Of course in practice it is widely used. Mostly because professionals know excel and don't seem to want to engage with more appropriate tools. The main problem with excel is that for the most part excel forecasts become a set of interdependent spreadsheets, and it is impossible to manage the links between them. Becomes particularly difficult when you start to do stressing and scenarios and what ifs. Whilst partially disagreeing with the sentiment I can understand where David is coming from when he talks about the importance of historic facts - its something that auditors get wound up about often to the exclusion of common sense! However it is always an important check and balance to compare a forecast with what you know. Start ups might require a different narrative but the principles are the same - you can see it in action if you watch Dragon's Den on BBC2 I have always characterised budgeting as what you expect to happen in the short term, and forecasting as what you would like to happen over the longer term. Although this gets muddied when people use them as motivational toys.

I agree with your statement "Excel should never ever be used for this work". Of course in practice it is widely used. Mostly because professionals know excel and don't seem to want to engage with more appropriate tools.

The main problem with excel is that for the most part excel forecasts become a set of interdependent spreadsheets, and it is impossible to manage the links between them. Becomes particularly difficult when you start to do stressing and scenarios and what ifs.

Whilst partially disagreeing with the sentiment I can understand where David is coming from when he talks about the importance of historic facts – its something that auditors get wound up about often to the exclusion of common sense! However it is always an important check and balance to compare a forecast with what you know. Start ups might require a different narrative but the principles are the same – you can see it in action if you watch Dragon's Den on BBC2

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