We live in a complex world beset by unpredictable events. The biggest over the past year has been the covid-19 pandemic. The global health crisis has disrupted economic activity, travel, commuting, socializing-nearly everything about how we live and work. Sales and revenue forecasts made at the beginning of 2020 are obsolete. New sales are dropping precipitously in some industries and taking off in others.

On top of the pandemic, there are the usual political and economic events that we all must deal with: elections, border tensions, even industrial espionage, to name a few. On the business side, disruptive events could include a new competitor, a new product or service, or an innovative new business model-or it could be one of your competitors declaring bankruptcy. Some of these events could offer opportunities; others might present some cash flow challenges. An event like an acquisition could result in major organizational restructuring, workforce reskilling, training, or large payouts.

Events can be seen as risks or opportunities, and each of them could impact your business. So, when preparing plans and forecasts, account for these events and model their potential impact-not just on finance, but on other parts of the business too.