What is a rolling forecast?
A rolling forecast is a financial forecast that always covers the same length of time ahead, such as the next 12 or 18 months. Each month or quarter, the period just finished drops off, a new one is added at the end, and the remaining months are updated with the latest actual results and assumptions.
Also calledcontinuous forecastrolling 12-month forecast
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- Horizon
- Fixed, such as 12 or 18 months
- Revised
- Monthly or quarterly
- Built from
- Key business drivers
How a rolling forecast works
An annual budget looks ahead twelve months in January but only one month by December. A rolling forecast keeps the horizon constant, so the business always sees the next year or more. After each month-end close, finance loads the actuals, reviews the key drivers, such as sales pipeline, pricing, headcount, churn and costs, and updates the forecast. Rolling forecasts usually work at a higher level than budgets, focusing on the drivers that move results rather than every account, which keeps each update quick. Many companies keep the annual budget for targets and pay, and use the rolling forecast for decisions on hiring, spending and cash. Planning software links the forecast to the ledger and HR data so actuals flow in automatically and versions are kept for comparison.
Common questions
What is the difference between a rolling forecast and a budget?+
A budget is fixed for the financial year and used as a target. A rolling forecast is updated regularly and always looks the same distance ahead, so it reflects the latest view.
How often should a rolling forecast be updated?+
Usually monthly after the close or quarterly. Monthly suits fast-changing businesses; quarterly suits more stable ones and takes less effort.
Does a rolling forecast replace the budget?+
Some companies replace the budget entirely, but many keep both: the budget for targets and accountability, the rolling forecast for planning and cash decisions.
Software for rolling forecasts
Part of Accountio’s accounting technology coverage · Glossary
