Rolling forecasts empower organizations to be prepared for and influence short-term outcomes. Rolling forecasts greatly vary from annual budgets that often have a barrier to quick responses.
Rolling forecasts are a method for continuous planning that look ahead of the current financial year. They help managers make strategic decisions, manage cash flows and set shareholder expectations. Utilizing a rolling forecasting approach also reduces planning and forecasting uncertainty. Additional rolling forecasts benefits include:
- Spots opportunities and risks
- Allows driver-based planning and a what if scenario analysis
- Offers the ability to redirect resources and priorities
- Fosters inclusion and empowerment in your organization
Effective rolling forecasts identify primary variables that impact your organization and the timing of their impact on operations. An additional element of rolling forecasts is that your organization should regularly import actuals into your model for variance analysis. Doing so will help discover issues early on and provide the ability to refocus resource and priorities as needed.
Rolling forecasts keep your planning current and accurate, as well as link the forecast to strategic and operational decisions. Rolling forecasts provide more insight into the drivers of performance, allowing organizations to better adjust targets mid-year. Organizations not using rolling forecasts are less likely to make these adjustments, and therefore less satisfied with their forecasting output.