Welcome back from a spooktacular weekend our dear business owners! You’re just in time for this week’s financial scoop on how to financially plan your business for seasonality. Wait — but didn’t you already cover that in last week’s blog post? Well we did, but this time around we’re going in depth and providing you with a free tool to forecast seasonality for your business.

As previously discussed, seasonality is a pattern that occurs every cycle for your business. To keep your business’ vitals strong, you must account for seasonality in order to be financially prepared for expenses, shortfalls of revenue, increased staffing needs, etc. Essentially, you need to financially plan your business for seasonality.

What does Chartd’s Seasonality Forecaster do?

The Seasonality Forecaster has two main parts to it: input data from the past 12 quarters in yellow fields and check out the data for the next 4 quarters that the sheet automatically generates. The seasonalized data you input has a trend to it, which is used to forecast future values. Basically, we take your trend and add growth to it, then multiply it by the seasonal factor (AKA the formula: (level + trend) x seasonal factor). This is just one method of calculating seasonality, other methods will give you slight variations. Okay, okay enough with the snoring — here’s how to use our easy seasonality calculator.

How does the Seasonality Forecaster work?

  1. Download the Chartd Seasonality Forecaster by clicking above.
  2. In the ‘Fiscal Year’ yellow field type in the latest year you have data for (i.e. 2021).
  3. In the ‘Quarter’ yellow field select the last quarter you have data for (i.e. Q3).
  4. Under the ‘Value’ column input the last 12 quarters of data you have in the yellow fields. Tip: the data can be an expense, # of products, amount sold, etc. Just make sure you are only using one type of data so you’re comparing apples to apples.
  5. Take a look at the Forecast section to see your estimated future values for the next 4 quarters. The graph will also automatically update with a visual of the seasonality trend and forecast.

Let’s walk through an example

Churros Co. has data readily available for the last 12 quarters. They want to avoid wasting money from over-ordering their inventory. In order to predict the next few quarters of inventory needed they download Chartd’s Seasonality Forecaster excel sheet.

The last date with data available is September 2021. In the Excel sheet, Churros Co. types 2021 in ‘Fiscal Year’ and selects Q3 from the ‘Quarter’ dropdown menu. Under ‘Value’, they input the last 12 quarters of inventory sold. They take a look at the values in the ‘Forecast’ section to predict the future inventory needed for the next 4 quarters. With this prediction, Churros Co. can avoid overordering and save money.

How does Chartd fit into all of this?

Financial business planning is our middle name — and it could be yours too! We take the pain out of complex calculations by offering financial planning software for businesses. Similar to our easy Seasonality Forecaster, we offer a system that allows you to input amounts and our software calculates the rest. Easily make a financial plan to prepare your business for seasonality. Try our free Seasonality Forecaster below, or contact us to try our Beta to customize a financial planning solution for your business.

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