Why The Rolling Forecast is better than The Budget?

The agile digital company relies on a forecast process, Rolling Forecast is an excellent tool of Financial Planning but organization is still not able to take benefits from this tool!! Why? The answer is simple!! It needs frequent real-time data and most organizations are structured to fit around traditional budgeting methods & processes.

Why it is becoming so important?

It helps organization to see a bigger and more accurate picture. This level of insight further enables your business to respond to market conditions faster, thereby making your organization more agile and competitive, inefficient tasks, allowing you to quickly anticipate and adapt to changing market conditions. It is dynamic and variances can be corrected anytime. Consider it honest forecast and more of it 70% of the employee can see how they affect the organization.

What are the best practices of Rolling forecast?

Use the right tool:

Finance teams usually turn to Excel for forecasting. But that may not be sound business practice. The smarter, more strategic approach is to deploy an enterprise performance management (EPM) solution. Adopting BI and AI technologies can be the game changer and will turn your business data into a commercial advantage by making instantaneous optimized business decisions.

Establish the objective

As rolling forecasts are used to determine potential future outcomes, you’ll need to establish which areas of your plan need greater detail to be able to create forecasts.

Determine your forecast duration

Forecasting can be a little tricky. Questions around the duration of a forecast and whether you should account for additional months or forecast out by 2 years come to mind. Keep your forecast and business cycle aligned, but add a minimum of a quarter to your forecast.

Identify Comparison Period

As you run comparisons, ensure that you include actuals and forecasts according to the same time frames.