How to Answer: Tell me about the financial forecasting you've been responsible for.
Advice and answer examples written specifically for an Accounting job interview.
22. Tell me about the financial forecasting you've been responsible for.
How to Answer
To answer this question, you have to understand what forecasting is. It's not just making a budget for yourself. You can make a budget for yourself at the pay rate you have right now for the next year. Do you take into account if you're going to get a raise? Do you project how much of a raise? Probably not. Forecasting takes into account the busy seasons and basically alters the budget for the year by the time of the year before it ever happens.
If you have no experience forecasting, then explain how you'd handle forecasting by demonstrating your knowledge of it.
Written by Bobbi Witt on January 8th, 2021
Entry Level
"Although I haven't had any work experience with forecasting, I do budgets for my family as well as myself to ensure everyone stays on top of their finances. I would, however, love to forecast for a company, and the way I'd do that is by reviewing the financials and budgets from the last five years of the company. By noting when the company has high cash influx and low cash influx, I'd be able to make a budget by quarter or even by month to keep the company profitable. By monitoring the budgets monthly over the first year of my forecast, not only could we stay on budget, but also make real-time decisions on saving money to become more profitable overall."
Written by Bobbi Witt on January 8th, 2021
Answer Example
"I helped my manager forecast the accounting budget for the next year by reviewing the budget from the previous year, noting the busy seasons, and also noting when the company had influxes of revenue due to high sales for the past five years. By finding the busy times of the year when sales consistently increased, we could increase our budget following that time period. This ensured we could hire two more employees immediately after the busy sales season for to have enough help to assist with year-end close out."
Written by Bobbi Witt on January 8th, 2021
Experience
"I know this example is a long time ago, but it was also the best learning experience I've had when putting together a budget and forecast. In 2009, I was a Plant Controller for a $75m corrugated box plant and the company had forecasted a significant downturn in the economy. They informed me to decrease all sales revenue by 20%, increase costs across the board by 10%, but increase freight by 25%. The increase to freight took my sales revenue from a positive $500,000 net income, to a loss. The plant was in East Tennessee, and the annual budget for freight was $7.5m. The plant could not sustain a freight increase of 25% and continue to operate. The General Manager and I personally visited the 5 closest freight companies and told them that we'd sign a dedicated contract with 2 carriers, guaranteeing them a certain number of loads to haul a week. If they didn't haul them, we'd still pay. The catch was that their prices must remain at current levels and couldn't increase for 12 months. This was a win-win for both parties, since business was already slowing for many trucking companies, and this was a guarantee of more business coming to them for 12 months. The outcome was that our plant only sustained a 7% increase in freight due to lanes that the freight companies didn't haul."
Written by Bobbi Witt on January 8th, 2021
Anonymous Interview Answers with Professional Feedback
Anonymous Answer
I also prepared a detailed Consolidated 3 year forecast during my time at a global architectural firm.
Over the last 12 months, I have been supporting clients applying for the CBIL and RLS with financial forecasts to support their applications, many of which have had positive outcomes."
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