Hire Financial Forecasters

Business Owners Need Financial Forecasting to Provide Data-based Estimates of Their Companies’ Financial Futures

The term “financial model” encompasses many kinds of numerical analytical representations of the past, present, and/or future performance of a company (or a unit of a company). Financial forecasters specialize in the future, using historical data to develop educated estimates of a company’s performance going forward. According to recent findings from Gartner Research, financial modeling skills are experiencing the highest growth in demand across all Finance and Accounting Function skills based on Q3 2022 data. While the data isn’t broken out further, it’s a good bet that a significant amount of the demand is for financial forecasting, which is one of the most sought-after specialties, since it predicts all or part of a company’s financial future. Business owners need financial forecasts to build economically viable businesses, raise capital, provide insights, and identify and track key performance indicators (KPIs). They also use forecasts to improve profitability and inform strategic decision-making, particularly in industries like e-commerce where margins and scalability are critical.

Building and maintaining quality financial forecasts is not a job for novices or even for many seasoned accountants. Financial forecasting can be complex and requires buy-in from multiple stakeholders with myriad needs. In many cases, financial forecasters draw on data, analyses, and feedback from multiple business units; they need to know how to navigate the nuances of each organization. These complexities—and what’s at stake in these analyses—make deciding how to obtain a forecast an important decision. Software tools such as Microsoft Excel and financial modeling software are useful, but financial forecasts are only as robust and sophisticated as the data, assumptions, and scenarios fed into them.

Unless your business is a large enterprise or has a CFO with advanced forecasting experience, you’ll probably want to hire a forecasting expert from outside your company. You can find good financial forecasting consultants from a variety of sources, including specialized financial services, consulting firms, and solo practices. Ideally, you want an expert you can trust to provide accurate forecasts and actionable insights that will be the basis for sound business decisions.

This hiring guide offers insights into how to hire the best financial forecasting consultant for your particular needs. You’ll also find appropriate interview questions to ask candidates and other information to help you navigate the hiring process successfully.

What attributes distinguish quality Financial Forecasting Consultants from others?

Experience is the primary factor to consider when you’re looking for a quality financial forecasting consultant. Ideally, your candidate will have at least five years of experience working in financial forecasting generally, plus specialized sector experience relevant to your use case. The best financial forecasting consultants are not only skilled and knowledgeable, but are also creative and adaptive practitioners—as every financial forecast has unique circumstances, stakeholders, and nuances.

In general, you’re looking for someone who has experience forecasting the performance of existing or new business endeavors and who can determine the best methods and data sources to use in building a high-quality, insightful, and actionable forecast for business owners. This includes the ability to translate raw financial data into clear forecasting models tailored to your company’s goals. You also want to look for qualities that demonstrate their experience in the business sector or use case you’re considering, including having built a robust forecast that captures all the elements you are looking for.

Qualified financial forecasting consultants also have the experience and executive presence to work directly with management teams, internal financial analysts, and other stakeholders to deliver actionable forecasts that will drive successful business outcomes.

How can you identify the ideal Financial Forecasting Consultant for you?

In addition to having familiarity with use cases similar to yours, a top financial forecasting consultant must possess a variety of hard and soft skills to effectively build sophisticated financial forecasts for clients:

• Overall technical knowledge of financial forecasting – Financial forecasting consultants must be able to build financial forecasts to analyze and predict future business performance and the outcomes of new initiatives—from small projects to large, strategic endeavors.
• Understanding of financial statements – Financial forecasters should be familiar with three-statement financial models; most qualified forecasters are also experts in cash flow statements and cash flow forecasting.
• Accounting and corporate finance knowledge – Most financial forecasters have experience with financial accounting and corporate finance concepts. This background enables them to dig deeper into data and understand the nuances of company performance.
• Accounting software skills – Financial forecasting consultants should be able to use various input and output accounting software platforms like Intuit QuickBooks and data management systems such as Microsoft Excel, Google Sheets, or SQL to create well-organized and intuitive forecasts. This could also include a working knowledge of enterprise resource planning, business intelligence, or other financial modeling software.
• Data management expertise – Expert financial forecasters should be able to perform in-depth data management and be comfortable handling large data sets and manipulating data.
• Strong communication skills – Consultants must be able to work extensively and directly with senior management to articulate complex concepts and to understand and incorporate client feedback into forecast iterations and presentations.
• Research ability – Detailed company- and industry-specific research is important for consultants, who will need it to develop the financial forecasting architecture and deliver a successful work product.
• Project management skills – Producing an insightful financial forecast frequently requires instituting a well-managed process that satisfies the numerous stakeholders with their different motivations and incentives.
• Creative and critical thinking, especially about communicating quantitative data – The consultant must be able to persuasively present their findings and recommendations to clients, provide solid data to support their findings, explain their methods and assumptions, and help clients navigate complex decisions.

How to Write a Financial Forecasting Consultant Job Description for Your Project

First, clearly describe your use case and business sector, what stage of any relevant strategic initiatives you’re in, or any other reasons you have for hiring a financial forecasting consultant at this time. This will help candidates self-select based on their expertise and give them a clearer sense of the nature of the project.

Next, start to think about the stakeholders and documents you think the financial forecasting consultant may need to work with for your project. You don’t need to have these lists and materials on hand and ready to go, but consider the steps needed to acquire them and at what point in the data collection process you’ll want the consultant to become involved. Providing information about the scope, intensity, and length of the work you need performed will help you and potential candidates understand what realistic project deadlines and budgets might look like. Bear in mind that a financial forecast is a living document and will likely need to be maintained and updated to remain useful on an ongoing basis, so you may want to build that expectation into your job description as well.

Finally, be clear about your expectations in terms of qualifications and experience, bearing in mind the guidance given earlier about use cases that require advanced expertise. Be specific about what you need.

What are the most important Financial Forecasting Consultant interview questions?

By the interview stage, you’ll have an understanding of your candidates’ education and background, so you can delve into their experience as it applies to your particular use case or sector. Questions to help you evaluate candidates include the following:

Can you describe your experience working on financial forecasts?

Ask when their latest forecast was implemented. Expect candidates to detail how they approached that use case so you can evaluate how sophisticated their approach seems. The more recent and robust their experience with your kind of use case, the better.

How would you approach financial forecasting for this specific use case?

Financial forecasting is one of the most important ways for companies to analyze future financial performance for planning and budgeting purposes. The candidate should be able to discuss the details related to your expected deliverables. If you’re using the financial forecast to raise debt or equity capital from banks or investors, the candidate should know what financial forecast models would be the most relevant for your potential investors—a startup burn rate forecast, for instance.

Can you describe your approach to managing data and deriving forecast drivers and assumptions?

It’s important to understand how each candidate would use existing financial reporting sources from the relevant business, especially if it’s in a niche market. For example, the candidate should be able to talk about how they would leverage your cash flow statement and provide additional analytical value by implementing financial forecast drivers, assumptions, sensitivity analyses, and economic indicators. While you may not be familiar with all the available financial forecasting techniques, the candidate should be able to explain the approaches they would use and why.

Will this financial forecast require additional information or data beyond what’s provided?

The answer to this question will help you assess how well the candidate understands your use case, and give you a sense of whether you have accurately budgeted enough time and money for the project.

What steps do you follow in your workflow?

While no two financial forecasts are the same, a typical process workflow includes the following steps:

Step 1: Define objectives and stakeholders.

• Discuss the specific reason a financial forecast is needed; for instance, because the company is going to raise capital or needs to forecast overall financial performance, including business costs, revenue, and KPIs.
• Decide what forecasting methods and data sources will best answer the company’s specific objectives and stakeholders.

Step 2: Gather company data.

• Compile information about the business model, including business operations overviews and any other business or financial analyses that are relevant to the use case.
• Gather the relevant financials. If the business is a going concern, aggregate existing business financials, including cash flow statements, and develop an initial financial forecast. If the use case is a new initiative, compile any financial analysis that’s been done to date.
• Analyze and adjust the initial financial projections to define sensitivities and scenarios that incorporate the risks related to business management and decisions. For instance, internal financial projections and financial statements prepared for tax purposes and audited financials may provide insights into potential risks and future performance.

Step 3: Conduct additional research and analysis as needed.

• Perform in-depth analysis of additional company data.
• Compare industry-specific standard performance metrics to the forecast and adjust assumptions and other inputs as needed.

Step 4: Implement forecast drivers, assumptions, and sensitivities to make the forecast insightful and robust for specific use cases.

• Run multiple scenarios that demonstrate how different assumptions will affect financial performance.
• Ensure that the design, inputs, outputs, and summaries are easy for all stakeholders to understand.

Step 5: Present findings and iterate/collaborate with management as needed.

• Prepare and deliver a comprehensive presentation of the financial forecast inputs and outputs that have been generated.
• Run additional scenarios as relevant.

Step 6: Finalize the financial forecast and decide on next steps and/or maintenance of the forecast model.

• Ensure that the deliverables have satisfactorily met all the needs of management and decide whether the forecast needs to be maintained and updated.
• Make a plan for any future work related to the company’s financial management.

Why do companies hire Financial Forecasting Consultants?

A financial forecasting consultant is a financial professional with deep experience and expertise in designing and building robust and insightful financial forecasts to enable business leaders to predict the future performance of existing operations or new strategic initiatives, strengthen their financial management capabilities, and/or improve results. Business leaders use the financial forecasts generated by consultants for many reasons, including:

• Gaining a better understanding of business plans, assumptions, and sensitivities.
• Identifying and tracking the financial metrics and financial goals that will have the most impact.
• Raising debt or equity capital from banks or investors.
• Buying a business or starting a new one.
• Tracking capital budgeting projects and profit margins.

For any of these use cases, hiring a qualified financial forecasting consultant will help you achieve a deeper understanding of your current and future financial performance so you can make sound business decisions to drive success.