With predictive insights drawn automatically from data, companies could identify evolving trends and guide decision making with foresight, not just hindsight. Numerous planning software packages emerged to handle this data complexity, making planning, budgeting and forecasting faster and easier - both for processing and collaboration. The vast amounts of available data for forecasting created a need for more sophisticated software tools to process it. However, Excel programs and spreadsheets were prone to input errors and cumbersome when various departments or individuals needed to collaborate on a report.īy the start of the 2000s, companies gained access to ever-growing operational data sources, as well as information outside corporate transaction systems - such as weather, social sentiment and econometric data. Software applications such as Microsoft Excel became widely popular for financial reporting. The emergence of mainframe computers in the 1960s and personal computers in the 1980s sped up the process. Consulting firms emerged to help companies use these new prediction tools.Īccounting and forecasting were difficult in the early 20th century because they depended on laborious hand-written equations, ledgers and spreadsheets. New types of statistics and statistical analyses were developed that could help business better predict the future. Modern business forecasting began in response to the economic devastation of the Great Depression of the 1930s. Businesses began to regularly use the term “budget” for their finances by the late 1800s. The word “budget” is from the old French word “bougette,” meaning “small purse.” The British government began to use the phrase “open the budget” in the mid-1700s, when the chancellor presented the annual financial statements. However, the definition can be expanded to include all areas of organizational planning including: financial planning and analysis, supply chain planning, sales planning, workforce planning and marketing planning.īasic business accounting practices date as far back as the 1400s, when Venetian investors kept track of their Asian trade expeditions using double-entry bookkeeping, income statements and balance sheets. The process is usually managed by a chief financial officer (CFO) and the finance department. Forecasts are usually adjusted as new information becomes available.
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