The changing of the guard in Washington, D.C., brings with it a level of uncertainty for government contractors (GovCons). New leadership, new priorities, and new economic policies can put executives on edge over how changes will affect the business already in place and the flow of future revenue.

A classic sports adage turns out to be wise advice for times like these: the best defense is a good offense. Uncertainty calls for the kind of nimble budgeting strategy possible with advanced financial planning and analysis (FP&A) software. Nue’s cloud-based financial platform is designed specifically for GovCons and other project-based companies to turn data into the key business analytics, real-time forecasts, and unlimited scenario planning you need to pivot profitably and adjust your budget to new market realities.

Assess Your Current Financial Position

Start with a detailed picture of where your company stands now, so you can calculate the best actions to take if the federal marketplace shifts.

• Keep it flexible. Stagnant spreadsheets and manual calculations will only hamper your budgeting flexibility. Nue’s FP&A platform enables you to share and update data across multiple devices and deploy it to any number of users in and outside your organization.
• Tally up current resources. Evaluate working capital, fixed assets, and ongoing fixed costs. When you import data from your current accounting system into Nue’s FP&A platform, you can create a comprehensive snapshot of the present state of your business and automate updates as often as needed. You might also gain insights into outdated aspects of your accounting system that are in need of restructuring to reflect how you do business today.
• Evaluate financial statements. Identify inefficiencies and potential cost savings so your company can face uncertainty running as productively as possible.
• Evaluate contract backlog. Nue’s contract waterfall report not only displays your firm’s existing business, but combines it with your contract pipeline to provide the revenue, profit, and margin outlook for the next 1-7+ years.

Devise a Budget Strategy That Rolls with Market Changes

With an FP&A system, your company leadership can quickly consider options and respond with the right moves whenever the market shifts.

• Conduct continuous planning, analysis, modeling, and forecast monitoring. Run unlimited what-if scenarios—optimistic, pessimistic, and pragmatic—to assess how variables such as costs, revenue, price changes, taxes, expansion into new markets, hiring, and employee compensation will affect cash flow and profitability.
• Remain compliant. Doing business with the government requires significant information requirements, whether the rules change or remain the same. That means substantial recordkeeping and calculations. Nue supports compliant responses to Defense Contract Audit Agency (DCAA) budget requests, including proposal rate impact assessments and establishing provisional billing indirect rates or forward pricing rates. FP&A software can provide these cost and rate assessments along with an integrated pipeline to capture new business estimates.
• Make the what-ifs your secret weapon. In the short term, your ability to run unlimited scenarios and rolling forecasts means you can make constant, automatic adjustments when the key performance indicators (KPIs) that most affect your business change, whether suddenly or gradually. In the long term, what-if analysis allows your leadership team to model operational risk and better sidestep or cope competently with inevitable challenges.

Be ready for change, whether that means coping with curveballs or taking advantage of new opportunities. Contact Nue for a free consultation and software demonstration at your convenience.