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Rolling forecasts

Dollar Photo Club

Note from the editor

No more forecasting to the wall.

Forecasting by its nature is dynamic. After you set your budget and anticipate what your sales will be for the next 12 months, you undo what you just did. As actual data come in, you adjust your forecast to replace what you thought was going to happen with what actually is happening. 

There's a way to make this process not only more efficient, but also more accurate — replace it with a rolling forecast. 

With a rolling forecast, as you adjust based on actuals, you push out the end date of your time horizon instead of forecasting for shorter and shorter increments until you reach December 31, or whatever the end of your time horizon is. 

By no longer forecasting to the wall, as budgeting specialists call it, your decision-making can improve because your tactics aren’t influenced by an artificial time horizon. Besides, what is so special about a December 31 date that the way you manage your business before that date is different than how you do so afterward? 

To help you learn more about what makes rolling forecasts something to consider doing, we’ve put together a collection of pieces on the topic. Taken together, they give you a picture of why you might consider making the transition and also what it will take to do it. We hope you find the pieces useful.

Robert Freedman Editor

How to transition from a static to a rolling forecast

Tools available today to help you sharpen your insights can't work if you're still using a static forecasting process, a consultant says.

The 3 most common forecasting errors retail CFOs make

Smart investment on the planning side can help retailers better align forecasts with actual sales.

Budgeting consultants tout benefits of rolling forecasts

Don't move from a static annual forecast all at once; start with your business drivers and phase in other metrics later.

Rolling forecasts support your enterprise risk management

This kind of projection can provide an incentive for long-term, value-maximizing behavior over short-term, bonus/target-based decisions rooted in the current fiscal year.

How a spirits company reduced stranded inventory with rolling forecasts

The company was losing sales when its popular products weren't in stock so it stopped using static forecasts to anticipate demand.