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Ten Keys to Successful Rolling Forecasts and One Critical First Step

Ten Keys to Successful Rolling Forecasts and One Critical First Step

Organizations are expected to move faster than ever, being able to ‘pivot’ like never before. But decisions made quickly still need the right background information, the right scope, and the right execution in order to be viable. For finance teams, the newest way to address these challenges is to adopt a rolling forecast which allows them to always have a vision for a set time frame, whether that is six, twelve, or eighteen months into the future.

Unfortunately, organizations looking to adopt a rolling forecast immediately find barriers to successfully implement such a plan, whether from other stakeholders or from their own systems, both of which have become stuck in a rut that prevents the business from making progress. Much like the current wave of nostalgia that’s sweeping the nation, the systems are stuck in the past, not looking toward the future.

Essentially, both have embraced the manual processes that have kept the status quo, but have prevented the business from being smarter and more efficient.

The Biggest Barrier to Smarter Business Decisions

When manual processes get in the way of effective forecasting—due to either errors or inefficiencies in compiling data—organizations fail to capture opportunities available to them or worse, make the wrong decisions.

“How many orders in the next twelve months?”

“How will changes in this line item affect the results in that one?”

“What will things look like in a quarter? Two quarters? A year?”

All of these questions must be answered quickly and more importantly accurately.

Ten Keys to Rolling Forecast Success (and One Critical First Step)

So what does it take to get the rolling forecast process correct? Technology, understanding, and strategy to name a few. Among the best practices in rolling forecasts, the following ten come to mind.

  1. Ditch Excel: Excel is a personal productivity tool, not an advanced business planning, analysis, and forecasting software.
  2. Understand Objectives and KPIs
  3. Identify the Duration
  4. Identify the Forecast Comparison Periods
  5. Understand and Analyze the Dynamics of Revenue and Expense in your Business and Related Drivers
  6. Plan Capital and Strategic Projects Separately from Rolling Forecast
  7. Start with a small select group of key department/operations managers, plan on increasing the scope over time and plan on continual improvement over time.
  8. Consider a Rolling Forecast as a Baseline Plan.
  9. Tie Rolling Forecasts into Strategic Plan
  10. Analyze and Understand How External Conditions Impact Your Performance

Looking to learn more?

Join Us for Lunch, Learn Best Practices in Rolling Forecasts

Wipfli/Brittenford will be holding a complimentary in-person event for financial professionals to learn more about rolling forecasts and how they can take your business into a future of better and more strategic decision making. This event will be held at Old Ebbitt Grill, 675 15th St NW, Washington, DC 20005, on Tuesday September 27, 2016 at 11:30 ET. Registration is extremely limited, so it pays to sign up in advance at the following link:http://www.eventbrite.com/e/best-practices-in-rolling-forecasts-tickets-26955606946?aff=brittenford

Can’t Attend? Download the Best Practices in Rolling Forecasts whitepaper from the Host Analytics.

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