Four Tips to Keep in Mind when Rolling Out Forecasts
Today, all areas of a business are modifying their operating models to keep up with trends and stay ahead. That is why organisations are searching for ways to rapidly respond to market conditions and meet their customers’ changing expectations. For a lot of organisations this means embracing smart rolling forecast. This enhances the efficiency and effectiveness of business budgeting and planning, as well as financial consolidation, financial forecasting, and reporting processes.
Rolling forecasts offer some benefits over an annual business budgeting process including establishing agility into the planning process, minimising long-term assumptions, and ensuring responsiveness to handle the changes in the business climate. Below are some tips to help organisations get started with rolling forecasts:
Rolling forecasts take place more frequently than annual budgeting; however, the frequency of its occurrence depends on the organisation’s needs. Those that need flexibility despite their steady business conditions are likely to choose semi-annual forecast. Organisations that are facing daily changes in their operations can choose monthly forecasting.
Train Team Members
As rolling forecasts are carried out at the front lines, managers and leaders must be well versed in the process. They have to train their team members who will do the hands-on updates to the forecasts. This makes it easier for them to complete their tasks and ensure they can come up with accurate forecasts for the organisation.
Organisations can successfully adopt rolling forecasts when they plan carefully and ensure there are internal experts who can help business leaders who are new to the process. They can think about rolling out forecasting in a gradual manner by piloting the program with a department or a few teams. This way, questions will be answered.
Ensure Forecasts Numbers are Updated Regularly
Annual business budgeting can take a considerable amount of time to complete and approve. Rolling forecasts take less effort; however, such effort is required more frequently. Organisations that commit to rolling forecasts should ensure all owners are given the time they should allocate to updating the forecast numbers on a regular basis.
Make Sure the Right Technology is in Place
Small companies may be able to manage rolling forecasts on Excel spreadsheet but this may not work for bigger organisations. A spreadsheet can cause issues for them as many people try and update it. It is then important to spend time assessing an appropriate software suite that has specific capabilities for rolling financial forecasts and multiple role-based users.