by Adam Hoeksema
I was working on my personal taxes a couple years ago when I realized how TurboTax had made a complicated process like taxes incredibly simple by using the power of the web and breaking the process down into small steps. Through my day job as a small business lender I had become incredibly frustrated with the quality of financial projections produced by our loan applicants, and I realized at that point that there was an opportunity to use the power of the web to simplify the financial projection process like TurboTax had done for taxes.
The light bulb went off and ProjectionHub was born.
To date, over 8,000 entrepreneurs have used our web app, ProjectionHub, to create financial projections, but we are just getting started. Rather than focus on what our app can do now, I want to imagine with you how the web will continue to reinvent the financial projection process in the future.
- Integration with Bookkeeping Software – By integrating directly with bookkeeping software like Quickbooks, a web based platform could allow you to import your past financial results to help build a baseline for your projections. Integrating with bookkeeping software into the future also allows you to track your projections vs. actual results on a monthly basis. This is a good process for entrepreneurs to go through, but when your projections are stuck in a spreadsheet it simply isn’t worth the time to go through the process of comparing projections to actuals.
- Improve Accuracy Based on Industry Data – Using the power of the web, it is possible to pull in industry benchmarks and data to help improve the accuracy of your financial projections. If you project 25% Cost of Goods Sold but the industry average is 60% for COGS, a smart platform can utilize that data to help make suggestions for improvement and ultimately help you build accurate, data driven projections.
- Automating Investor Reporting – Investors often make investment decisions, in part, based on your financial projections. However, after making the investment, investors typically only see your actual financial results, there is no comparison to the original projections in most investor reporting tools. As an investor, I want to not only see how you are doing now, but what you said you were going to do. By comparing projections to actuals, investors can either help you improve to reach your goals, or potentially invest additional capital because you are blowing your projections out of the water.
As we continue to re-imagine the process of creating financial projections, we want to hear from you, how else can the web reinvent the old school, spreadsheet based process of creating financial projections?
Adam Hoeksema is the Co-Founder of ProjectionHub which is a web application that helps entrepreneurs create financial projections for potential investors or lenders. ProjectionHub is like a TurboTax for financial projections.
ProjectionHub | Courtesy of Adam Hoeksema