Capital monthly forecasting is a monthly process aimed at projecting anticipated capital expenditures within the financial year.
To generate an informed forecast regarding the allocation of resources and anticipated capital outlays, it includes:
- analysis of capital spending,
- market conditions
- upcoming projects
This method serves as a cornerstone for prudent financial planning and resource utilization, ensuring optimal capital allocation and sound financial decision-making for the council.
How monthly capital forecasting supports effective financial management
Financial management of the council’s Capital Programme is crucial because it supports financial planning, the allocation of resources, management of risks and informed decision making.
Financial planning
Forecasting facilitates better planning and allocation of resources within the Capital Programme. It enables anticipating expenses, ensuring timely availability of funds, and preventing overspending or delays in delivery.
Resource allocation
It helps determine the financial resources needed for each project. This allows for more efficient resource utilisation, for example advancing Project A's works due to freed-up resources from Project B's delay, minimising Programme impact.
Risk management
Forecasting identifies potential risks early on, allowing for proactive measures to mitigate them. This helps in maintaining project timelines and budgets.
Decision making
Accurate forecasting provides valuable insights for informed decision-making. It aids in project prioritisation or de-prioritisation, resource allocation, and necessary adjustments to ensure alignment with the budget and overall Programme objectives.
How to perform monthly capital forecasting
The Planning Budgeting Cloud Service (PBCS), accessed through My Oracle, is a system used to review and update forecasts. In PBCS, you can review transactions, update the capital forecast based on the latest information, and ensure its accuracy.
Outside of PBCS it is vital to evaluate project risks and opportunities, and assess their financial and delivery impact. This comprehensive approach ensures effective financial management for the council’s Capital Programme.
You can get guidance on carrying out capital project manager tasks on the My Oracle Hub.