Best Practices for Rolling Forecast Implementation

Rolling forecasting is spreading to more companies, are you implementing it correctly?


The use of rolling forecasting is now the sign of a forward thinking company. It allows realistic forecasting that can take in variations in situation and fluctuations in markets, whilst still being able to give relatively realistic forecasts.

It is becoming more widely used throughout companies across the world and we wanted to see what the best practices for this were:


Rolling forecasts are not just about telling people what they should expect, much of it will be about adapting in the face of change. If a static forecast is expected to produce a certain result, then a rolling forecast allows companies to adapt to increase productivity and profitably.

If a rolling forecast points to output or revenue being reduced due to a certain change, then it gives a business a far better capacity to adapt their strategies to minimise damage or maximise opportunity.

Therefore, it is important that companies become flexible and agile in the face of these results. It means that business leaders need to have the foresight to change when it’s needed. This is something that will impact the entire company, not just those in the finance function and therefore communication channels out of finance need to be effective.

Don’t Panic

When implementing rolling forecasts, it can often cause panic amongst other departments. Changes in product lines or audience will lead to changes in forecasts. As rolling forecasts change, some can find this unsettling and make rash decisions when none are needed. Natural fluctuations occur (take the run up to Christmas for instance) and these need to be communicated and explained, to make sure that people do not panic and make bad decisions.

Set Realistic Goals

Rolling forecasting is an art that takes time to perfect. The fact is that despite its rising importance in companies and the overall benefits that it has, it takes time to get things right.

The important thing to remember when implementing this kind of work, there needs to be realistic goals set for variance. If a project is deemed a failure before it has had time to adapt, then it will never be able to show its full potential.

Decent Time Scale

Although rolling forecasts are designed to give a more flexible and often short term set of forecasts, setting the correct forecast time is one of the most important aspects of implementing effectively.

This will depend on the company and industry, but as a rule of thumb, anything under two months is too short and anything over 9 is too long. If a forecasting period is too short, then small changes would have too much effect on the numbers and too long and the potential to adapt is lost.

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