In today’s rapidly changing business environment, it is essential to have accurate and up-to-date forecasts to make informed decisions. A rolling forecast is a planning technique that can help businesses stay ahead of the curve by constantly updating their forecast based on the latest information. In this blog post, we will explore the benefits of a rolling forecast and how to create one for your business.

Benefits of a Rolling Forecast

A rolling forecast offers several advantages over traditional forecasting methods. Here are some of the benefits:

  1. Flexibility: Rolling forecasts can be adjusted quickly in response to changes in the business environment. This means that businesses can adapt their plans as circumstances change, which can help them stay competitive.
  2. Accuracy: Because rolling forecasts are updated frequently, they are more accurate than traditional annual forecasts. This means that businesses can make better-informed decisions based on the latest data.
  3. Forward-looking: Rolling forecasts focus on the future rather than the past. This means that businesses can anticipate changes and plan accordingly, which can help them stay ahead of the curve.
  4. Collaboration: Rolling forecasts involve input from multiple departments within the organization. This means that everyone is working towards the same goals, which can help improve collaboration and alignment.

Creating a Rolling Forecast

Here are the steps to follow to create a rolling forecast for your business:

  1. Determine the Forecasting Period: Decide on the time period for your rolling forecast. Most businesses use a 12-month forecast period, but this can vary depending on your business needs.
  2. Identify Key Drivers: Identify the key drivers of your business performance. These could include sales revenue, expenses, and production volumes. It is important to understand how these drivers impact your business so that you can accurately forecast future performance.
  3. Set Assumptions: Set assumptions for your rolling forecast. These assumptions should be based on your historical performance, industry trends, and economic indicators. It is important to update your assumptions regularly based on the latest data.
  4. Build the Forecast: Build the forecast based on your assumptions and key drivers. Use a spreadsheet or forecasting software to model different scenarios and adjust your assumptions as needed. It is important to review and update your forecast regularly to ensure accuracy.
  5. Monitor and Adjust: Monitor your actual performance against your forecast and adjust your assumptions and forecast as needed. Regularly updating your forecast will ensure that you have the most accurate information for decision making.

Conclusion

A rolling forecast is a powerful tool for businesses operating in a dynamic environment. By constantly updating your forecast, you can stay ahead of the curve and make better-informed decisions based on the latest data. If you need help creating a rolling forecast for your business, JTT Accounting can help. Contact us today to learn more about our forecasting and budgeting services.