[Anonymous]

I interviewed for a new job that is mostly accounting but has forecasting in the job description. I have never done forecasting and modeling before. Is this something that is difficult to learn on average?

[Anonymous]

Do you like analytical things and do you like playing with technology tools?

If so, you're probably golden.

If not, it'll probably be a struggle for you.

Modeling seems to rely very heavily on playing with the technology tools made available to you (whether through Excel or through a custom solution), learning how to use them and then taking off with them. If you're comfortable with technology, then you'll be able to pick it up fairly quickly, from what I've seen (with analytical skills too); if not, then you'll struggle, but anything can be learned in time.

Forecasting is all about thinking outside the box and thinking analytically. I have a big love/hate relationship with forecasting. I love analyzing stuff, and I like the power of being able to forecast, but the nitty-gritty drives me crazy. I've had to do some projections over the last year that needed to have a high level of accuracy. Preparing them drove me up a wall (lots of “How am I supposed to know what's going to happen??? I don't have a crystal ball!” moments), but now I'm to the good part. The projections were broken out on a month-by-month basis and it's been fun each month to replace the estimates with actuals as part of my process to update the forecasts, and see the actuals come in extremely close to my estimates. So satisfying. 🙂 So, for me – someone who loves analytical stuff and loves the mind-game that's necessitated by predicting – forecasting wasn't hard to learn, though I still have a love/hate relationship, where one day the hate part seems so strong I forget the love, and the next day the love is so strong I forget how to hate.

But if you want things to be black-and-white, set-in-stone, concrete and reliable then forecasting is not for you. Forecasting is all about pulling $*** out of your *** and trying to make it look like it's based on reality. If you want to live on the edge, and experience the thrill of seeing that your random best estimate was actually OK, then forecasting is fun.

Modeling I have less first-hand experience with, but from my understanding, it requires a high level of comfort with technological applications. I saw this thread earlier today: https://www.another71.com/cpa-exam-forum/topic/financial-modeling-anyone and am curious to see what other courses are mentioned. I might take one just to learn more about it, cause even though I haven't done much of it, I love learning how to use technology tools to make my life easier, so it's something I think I would enjoy. But if you don't enjoy tech tools, then it would drive you crazy.

[Missy]

Not difficult to learn but very much about working with various departments particularly sales. Note: sales managers are well intentioned but entirely unrealistic. So I just finished my budget which is required to use the sales budget which is impossible. However for my monthly forecast I can be more conservative. For example my sales manager budgeted 250k for commission which is not going to happen in the next 3 years. I'm obligated to build a budget around his fairy tale but not going to put that in monthly. Same goes for engineering, they think they can build a million dollar piece of equipment for $1.50. It's really more about exercising skepticism with your inputs as everything is built around the sales budget which should be provided to you and not at your discretion. Your job to make sure the bottom line is realistic based on past performance and looking for relationships in accounts from one year to the next. An increase in salaries of 3% can be reasonable, an increase of 25% needs good explanation.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

If I had a favorite task in accounting it would probably be forecasting, projections, budgets and models. It's one of those tasks that you can be involved with the minute details, data gathering and “data entry” or you could be at the other end of the spectrum and be the one looking at the big picture and high level of detail.

It's one of the best ways to learn the operations of the company and where and how they make and spend money. You are usually collecting data from other departments (sales, production, marketing, etc.) and compiling their annual plan for operations. We have a 5 year plan, annual projections and budgets. Then monthly we compare actuals to budget and if you see big variances or holes you would then look back to the projections to see if what you thought would happen actually did. You also realize how many department heads have no idea what they actually do or spend.

For modeling we used that for acquisitions, financing decisions, purchasing decisions, etc. They would throw in What-If analysis that we would re-do 6 different ways and never really know what it was for. Good times!

I agree with the recommendation that if you like everything black and white and concrete then you probably would not like this role.

[Anonymous]

Thanks for the feedback!

[Author]

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