A rolling forecast is a differentiating planning concept that can help organizations find opportunities amid intense competition. Instead of relying on a once-a-year budget, finance teams can regularly update assumptions, monitor key drivers, and adjust to changing conditions. For some businesses, this approach has even replaced the traditional annual budget altogether.
How rolling forecasts differ from traditional forecasting
Rolling forecasts differ from traditional planning approaches in that traditional methods merely provide periodic updates against the annual budget, adjusting for YTD actuals, and are associated with a specific fiscal year. In the practice of rolling forecasts, there’s no set fiscal year, but a continuous ‘roll’ as periods of history are dropped and new periods are added to each forecast cycle.
Rolling forecasts require that businesses revisit their strategy throughout the year to continually align resources and activities. This helps them become nimbler and more responsive as they focus on steering business performance to align to changing business conditions. Additionally, a rolling forecast can provide organizations with improved flexibility, agility, and effectiveness in budgeting and planning as the rolling forecast is future-focused.
Best practices for implementing a rolling forecast
There’s no one-size-fits-all application for implementing rolling forecasts. Every organization needs to develop a rolling forecast in conjunction with its own unique set of business drivers, timelines, and dynamics. Even so, the following eight steps can provide businesses with a sensible approach that can be used to create and implement a rolling forecast for any organization.
- Identify the strategic goal and begin with that goal in mind. Engage stakeholders’ willingness to embrace the new process and drive toward organizational goals.
- Determine the stakeholders who need to contribute. Not everyone needs to be a part of the process. Stakeholders who can contribute relevant, unbiased, and insightful intelligence should be included.
- Consider the time horizon and time increments needed to achieve the stated goals. Consider what time frame will best fit your organization. For example, a rolling forecast could accommodate 12 months, 18 months, six quarters, or be a combination of months and quarters (where the next two quarters are displayed at a monthly level and the following four quarters are at the quarterly level).
- Identify quantitative and non-quantitative elements. Determine the high-value drivers that impact and grow the business. These drivers should be key to consistent decision-making and serve as critical levers driving your what-if analysis and long-range plans.
- Vet the key sources of data and appropriate granularity. Ensure that data sources are correct, high quality, and in accordance with the modeling in place. The earlier periods in the process may require more detail and scrutiny than the future quarters.
- Deploy the appropriate technologies and processes. To support high-value initiatives, robust technology, such as Anaplan, must be in place. The process requires a platform that’s flexible and can easily and quickly adapt to changing conditions inside the four walls of the business, as well as external market and competitive conditions.
- Establish scenario analysis and business sensitivity modeling. Use cloud-based financial planning technology that can support multiple what-if scenarios and can be created ‘on-the-fly' as business needs arise.
- Track performance to the rolling forecast. Rolling forecasts open opportunities for organizations to increase visibility into performance and provide the flexibility to keep strategic goals on track.
How Anaplan makes rolling forecasts work for you
Anaplan’s AI-infused platform brings speed and intelligence to rolling forecasts by connecting financial, operational, and market data in one environment. Finance teams can instantly run multiple “what-if” scenarios, apply predictive forecasting models, and use natural language queries to surface insights. This lets you move from static updates to proactive planning that’s informed by both real-time signals and forward-looking analysis.
With Anaplan, rolling forecasts shift from being an aspirational practice to a practical advantage — enabling you to navigate uncertainty with confidence and turn volatility into a lever for growth.
