Turn Current or Planned strategies into future Financial Statements and
Cash Flows
Your RTO Accounting Specialists now support RTO businesses by providing specialised Predictive Accounting Solutions.
Understand the full implications of your decisions on profitability and cash, before you make them. Adapt quickly and confidently to a changing world.
Run what-if scenarios to evaluate risks and opportunities.
Set financial goals and assign accountability for results. Analyse financial performance in a timely and practical way that drives better decisions.
Predictive Accounting
Predictive Accounting focusses on the preparation of prophetic and foretelling financial statements, rather than the historic accounting for compliance purposes, which preoccupies many practitioners.
You want to work with the results, to improve all financial performance, including profit and cash flow, rather than spending countless hours preparing data of doubtful value. They want to predict their future Revenue Statement, Balance Sheet, and Cash Flows, all in internationally accepted reporting formats.
This is known as PREDICTIVE ACCOUNTING.
Utilising the latest in predictive accounting software together with a deep understanding of not only complex accounting principles but also of RTO operations and systems, Your RTO Accounting Specialists will work with you to provide financial forecasts that will guide your business with knowledgeable decisions.
Make better decisions, increase profit, & accomplish your goals.
Witness the impact of important decisions on your profit, cash and all important financial ratios.
We provide you with integrated income statement, balance sheet, and cash flow statement allowing forecasting up to 10 years, allowing you to view the specific aspects of your business that are working and ones that are not. With that insight, you’ll be able to make the adjustments that will help your business succeed.
A Case Study
A small RTO with two common soft qualifications on scope. The CEO wants to add a trade qualification to take advantage of the growing demand for these courses and the additional government funding.
Currently generating revenue of circa $750,000 per annum with expenses of around $600,000, employing two trainers, one admin and a contracted compliance specialist. Training delivery is blended and the RTO rents a premises with one training room that can seat 20 students.
Working with a plan that the CEO provided giving initial estimates for establishment costs to add the qualification to scope, employing an additional trainer and .5 FTE admin, additional time from the compliance specialist and the costs associated with establishing and renting a training centre, we are able to provide scenarios that will accurately predict the financial outcomes.
The CEO asked to see predictions that resulted from various combinations of student number forecasts, fees charged, trainer salaries, loan costs relating to the training centre. Using the profit & loss, balance sheet and cash flow forecasts we provided that took into account the scenarios the CEO was able to make decisions regarding all the variables as well as altering their current business strategy and move forward with a plan confidently.
A Better Forecast
Why aren’t all accountants and financial controllers doing Predictive Accounting to this level? Because it is a difficult and time consuming task, and unless you have very large ERP systems available (like SAP , or IBM Cognos for example) there usually won’t be an affordable tool at hand unless it is MS Excel.
Even if the ubiquitous spreadsheet is used, it is an extraordinarily difficult task to prepare the key driver based budget on it’s own, let alone the actual performance review, and the rolling forecast. Not only difficult, but error prone.
Prof Ray Panko at the University of Hawaii has produced valuable research on undiscovered error rates, which are a whopping 88% of all sheets he surveyed. (“Why Top 100 Companies Use Predictive Accounting” by Paul Barnaby CA CPA, Beyond Accounting Technologies Pty Ltd)
A 3 way Budget ( Revenue Statement, Balance Sheet, and Statement of Cash Flows) takes 10 times longer to prepare in a spreadsheet, compared to purpose built applications.
Your RTO Accounting Specialists have invested in specialised Predictive Accounting software and are highly trained to not only use the software but provide interpretations so our client’s are fully informed and know where their business is going.
