Cash Flow Q&A: Bookkeeping vs. Forecasting

Posted 30 September by Blaine Bertsch in Accounting, Bookkeeping, Cash Flow, Entrepreneur, Small Business, Videos

Barb and Blaine discuss the how forecasting can be a natural extension to bookkeeping/reconciliation duties.


Hi Everyone,

This is Blaine with dryrun and today Barb is joining me and we’re going to talk a little bit about the difference between bookkeeping and forecasting and how bookkeepers and accountants can advise on their clients directions and help them along.

But they are two quite different tasks, aren’t they Barb?


They really are, so when we talk about the idea of bookkeeping versus the idea of forecasting…as we start to imagine this role of the transformative bookkeeper the information manager, rather than the traditional role of a bookkeeper, there does seem to be some confusion. So I’d like to shed a little bit of light on that.

Traditional bookkeeping is a really critical role for every business on the planet. Accurate books are the grammar and syntax of the language of finance I just had somebody recently tell me, which I thought was a really beautiful statement.

Forecasting is significantly different.

When I speak with bookkeepers, and accountants which is daily, I really strive to make it clear that there are actually, instead of the continuation of the role from bookkeeper to new bookkeeper it is actually a transition from bookkeeper to strategist.

I think that is a critical difference to help people really get their mind around forecasting and some of the mechanics of using that financial data in order to forecast forward.

Ok, so let me give you an example, my bookkeeper, our bookkeeper anyone’s bookkeeper, we are expecting for that person to have a really clear expertise and ability to manage a set of books and account for every penny and processes that are really dialled in and that take place like clockwork and a certain kind of problem solving that is fairly binary.

So if it’s not this, then it’s that…

On the other hand, when that same bookkeeper moves into a forecasting or a advisory role for their client… We’re expecting those excellent personality traits and areas of expertise and hobble them when they move into the area of forecasting.

In forecasting I’m not so concerned with whether a business is moving say north by northwest just to make a compass comparison.

I’m just concerned as a business owner, I was spinning my tires. Tell me which of the four cardinal directions to move in. Am I moving more southeast west, it’s a much more risk tolerant type of skill set that is required.

So, can we account for every penny in the future? We can’t account for every penny in the future, and that’s I think a really, I’ve seen it drive bookkeepers mad…because they want this forecast that is so dialled in that it becomes information paralysis. Or analysis, paralysis I think is the actual phrase.

And it is really important to avoid that, not that that is not in a business clients future for strategy, but that’s not steps 1 through 8.

Many businesses need to first be moved ahead by the broad strokes.

So from stagnation to knowing which direction to go in. And then it is refinement by degrees.

I think that’s really important and it’s probably the biggest mental block that I see for people to be true power users and truly successful using dryrun with clients.

The other element is a degree of fuzzy logic, problem solving. It’s a skill set that we grow into…so when we think of problem solving in terms of generally accepted accounting principles, there again, it’s that binary.

Ok so it’s that black or white, it’s this or this, maybe it’s option C sometimes, right, maybe it’s a situation we don’t encounter that often but there’s a clear set of protocols for it.

When we move into the kind of problem solving that strategy demands, it’s a much…it’s at first you are casting the net for that problem in a certain way that appears different than a traditional bookkeeper role.


Yeah, so the way I’m kind of hearing you is the difference is instead of the bookkeepers phone ringing and they answer the phone, the business person saying, I’m out in the woods and I’m lost.

Instead, you go a month back and they throw on their t-shirt, they throw on their hiking boots and they walk out and say straight to the business owner, let’s just start heading that way and start giving them some sort of direction.

So it’s very different from that real nickels, dimes, bookkeeping has to be perfect. Where forecasting like you are saying is let’s just head off in this direction and you know, you are kind of heading in the right direction, you start to hit the high ground and you see a little bit more but…which is an enormous help for business owners. That is mission critical but it’s still just giving them a solid direction, giving them a little bit more visibility.


The really important thing I think is that while it feels out of the bookkeepers comfort zone, it’s not. We employ this type of thinking, this type of strategic direction and I’ll call it fuzzy strategy in many areas of our lives.

So for instance, if I were lost in the woods, I would look as they tell me to look on which side of the tree the moss grows. Like I don’t know exactly where in that area of the forest I might pop out into the field but I know I must first head north, it’s all, it’s like a survival skill more than anything else.

I know to get to warmer weather I have to head south, I don’t necessarily need to know by which interstate I’m going to do so right off the bat. The first step is to turn the car around and drive downward.


Well, you know we have talked about this a bunch of times…the typical financial reports that I would get from my accountant and here’s a good example it feels a little bit like I am lost in the woods, I call my accountant and said I’m lost in the woods and then they come walking beside me and say here’s the road you took to get to the campsite. Yeah no, I need to know what direction to go, I know how I got to the campsite I was driving that doesn’t help me right now, right now just point a direction. Let me know where to go.

But Barb, I think we are coming up on the end of our time here, so hopefully that helps you, grasp a little bit the difference between bookkeeping and where the forecasting comes in and helps you figure out how you can coach your clients or if you are a business it gives you a little bit of an idea who you might want to engage to help your business move forward.

Barb, thanks for filling us in on that, everybody thanks for watching and definitely reach out to us on chat at if you have any questions or want us to tackle another topic.

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