Forecasting Funding

Hi Sophie

It depends on what exactly you are trying to do. Most people will use their funding reports or their MIS as a way of doing this. You can get really scientific with this or do this a bit more broadly. As a starting point you should plan what you are trying to forecast, and then set up some mechanisms that allow you to do this on an ongoing basis to try and remove as many manual processes as possible. 

Your funding reports will drop in monthly payments for future months so this is usually a good place to start. This will give you remaining monthly payments for the rest of the academic year for your existing learners without you having to do too much work. You can also quite easily set up some formulae to predict when achievement payments are going to land using planned end dates. You might want to apply some dampening calculations to these values which allow for early leavers based on achievement rates for example. it may be useful to know this maximum value.

That will take care of the income for the learners that you know about, but you may need to factor in those that you do not know about such as future starts. Someone should have a plan for starts volumes that you could pick up and apply some average monthly costs to to help predict future unknown income, factoring in things like incentive payments for 16-18 year olds may be. You might want to be able to have some mechanism for flexing this up or down to model more or less starts than planned.

There are other ways of doing this which are less complicated and depends on your business. We look at year on year patterns of funding performance and apply those patters to current funding to predict what  the next few months or year look like. If your delivery is more volatile then this may not work but if your monthly volumes and values are more steady then this could be useful top level modelling info.

There are specialist forecasting pieces of software out there or consultants who can some in and help you set this up. It's really important information - more so now than ever - so may be worth some investment.