Rolling Forecasting gathers no moss, is your business the same
Rolling forecasts should be an integral part of your business and your budgeting and forecasting schedule. Yes, in your perfect world, your final forecast or budget plan would or should last your entire fiscal year. But instead and unfortunately, any budget or forecast is a living, breathing business document. You can be guaranteed that weeks after you put the final touches to your forecast, it could be obsolete due to internal or external changes. Like any good Captain, you may need to change course mid-trip to reflect changing conditions.
Rolling Forecasting is the answer
Forecasts for most business will change month to month and rolling forecasting help business to adjust and accommodate the changing environment. By implementing rolling forecasting allows you to layer on changes that can happen, such as landing a new contract, possibly lose a client or simply an increase in your costs base. With a rolling forecast is possible to fine tuning and adjust as needed and required.
Rolling forecast should be standard for any company that operates in volatile markets, going through a high growth period or maybe abnormally sensitive to fluctuating costs, margins, raw materials prices or currency swings. It is true that most high-performing companies do perform monthly or quarterly checks and use rolling forecasting accordingly, to help control costs their costs, maintain their margins, and generally assure that performance aligns with business strategy and objectives.
Rolling Forecasting best option
Rolling Forecasting does take time, and if you using spreadsheets, then you spend more time creating the forecast (trouble-shooting formulas, tracking down broken links and consolidating disparate worksheets) than you do analyzing your new forecast and the impact of past and future variables, and strategizing adjustments. For all the effort it takes to get there, your reforecast still doesn’t have the desired level of detail your need to manage your business.
An infinitely better route exists for rolling forecasts, and that is with Forecasting and Planning software. You can have a dynamic planning process that includes the ability to generate frequent and accurate forecasts. Your numbers can reflect what has happened and what you expect to happen. If you are still unsure, download our whitepaper on Budgeting Best Practices