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Improved Revenue Forecasting

Paramount among the many analytic challenges facing Law firm CFOs and their financial staff is accurately forecasting cash. Relying on the law of large numbers, most firms assume that prior averages will hold, so they use history-based, firm-wide performance ratios to obtain cash flow projections.<br/>In a growing firm, this simplistic approach has an inherent weakness: over-budgeting revenue. The problem is that not all of this year's growing production will be collected this year.

6 minute read November 01, 2004 at 11:15 AM
By
Norm Mullock
Improved Revenue Forecasting

Paramount among the many analytic challenges facing Law firm CFOs and their financial staff is accurately forecasting cash. Relying on the law of large numbers, most firms assume that prior averages will hold, so they use history-based, firm-wide performance ratios to obtain cash flow projections.

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