User:John Pirro

John Pirro states that predicting overheads is relatively easy for an existing business. Predicting sales can be less so, although it is easier over a shorter period.

If you’re a manufacturer, you’ll have a bunch of live quotations out with customers at any one time. You should be able to predict reasonably accurately from past experience what proportion of these will turn into firm orders. You should certainly known the length of your manufacturing cycle, and what terms you’re selling on. From these pieces of information, you can predict when you’ll be receiving the cash.

For wholesalers or retailers, that sell on a more immediate basis, you need to look back at your historical data at sales in the relevant week last year, and adjust by what you know about major customers, or whatever else is happening in your market now.