● A rolling forecast is a report that uses historical data to predict future numbers and allows organizations to project future results for budgets, expenses, and other financial data based on their past results. This enables organizations to adapt plans and resource allocations based on changes in the economy, the industry, or the business.
● Rolling Forecasts vs. Traditional Budgets
The traditional budget is an annual plan you calculate for the fiscal year based on the previous year’s historical data. Instead of continuously updating the plan with a rolling forecast, the traditional processes have finance teams work with individual departments to create a static view of the company’s revenue and expense projections.
Two primary problems come with measuring your business only against a traditional budget:
○ Not working with an accurate view of the business- due to long forecasting periods
○ Treating the budget as an end goal
Rolling forecasts support a continuous planning process that eliminates these concerns.
