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Projections are basically a straight forward process that can be made almost perfect if built around program and project managers.  It's all about these key staff members.

Projections can be a straight forward process - not an easy process - but a process that can save an organization if the heart of the process is driven thought the program and project managers.  They are both the drivers of the process and the main benefactors.  The projections will be most beneficial if driven through these people.  I have learned and observed over the years that program and project managers are:

The ones in the trenches
Idea makers
Routinely initiate action - decision makers
Initiate purchases
Generate revenue and support
Make decisions on the fly (real-time basis)
Sometimes are visionaries
Have the pulse of the organization
Because of these realities, they will always be on the leading edge of the inter-change of vital information effecting the organization.  Managers by definition, when it comes to information and most importantly financial information, are constantly receiving, processing, filtering and taking action.  They are both first responders and conduits of messages.  Often they find themselves providing both of these functions simultaneously.  For these reasons, we must drive the projection process through the manager position.

Projections, even better, regular monthly rolling projections, will be your single best resource to predict fiscal year financial outcomes based on the most current available information.  In other words, rolling projections provide the platform to transform and meld current new information with standing expectations which financially is resident in the annual budget.

Program and project managers are in the best positioned to perform this task of updating rolling projections each month.  Senior managers, CFO's and CEO's should avoid the temptation to meddle in this process especially for the first pass.  I believe the process works best when the organization's line-managers are charged with the initial monthly analysis of financial reports that includes recommendations to revise and or affirm projections (budget overrides) for the balance of the fiscal year.  If senior management jumps in too early they will taint the information and devalue the process.  There will be plenty of time for senior management and even board members to interact with this analysis process but they must be patient to let the everyday managers in the trenches process, filter and take action and make their projection adjustments independently.  The resulting information provided to senior management will be very revealing.  How management reacts to that information will be the topic for the next installment in this series.

Mr. Gellman is a Shareholder with Rubino & McGeehin, Chartered and he manages the CSG (consulting services group) which provides specialized management and accounting consulting services to exempt organizations, organizations and companies receiving Federal Funds and government contractors.  CSG work is largely focused on management advisory services, budget systems, indirect cost rate systems and compliance, accounting systems and services support, and audit preparation assistance in coordination with client accounting departments. 

For more information about Mr. Gellman and the courses in nonprofit finance, budget and management he teaches, please visit http://www.rubino.com/about/bios/gellman.htm or contact him directly at mgellman@rubino.com.