5 Proven Strategies for Managing With Rolling Forecasts

When it comes to effective financial management, traditional budgeting methods are becoming outdated. In today's dynamic business environment, flexibility and adaptability are key. This is where rolling forecasts come into play.

John Stretch, a renowned expert in financial management and forecasting, has revolutionized the way businesses approach budgeting. His innovative approach, known as "Managing With Rolling Forecasts," helps companies stay ahead of the curve and make informed decisions.

Managing with rolling forecasts

by John Stretch (Kindle Edition)

4 out of 5

Language	:	English
File size	:	5881 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	122 pages
Lending	:	Enabled

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What are Rolling Forecasts?

Rolling forecasts are dynamic financial projections that provide a continuous view of a company's future performance. Unlike traditional budgeting, which relies on annual or quarterly cycles, rolling forecasts are updated regularly, typically on a monthly basis.

This approach allows businesses to react quickly to market changes, adapt their strategies, and make data-driven decisions. By embracing rolling forecasts, companies can stay agile and responsive in today's fast-paced business landscape.

The Benefits of Managing With Rolling Forecasts

John Stretch's approach to managing with rolling forecasts offers several key benefits:

1. Enhanced Accuracy

Traditional budgeting often relies on historical data and assumptions that may not accurately reflect current market conditions. Rolling forecasts, on the other hand, provide real-time insights based on the most up-to-date information available. This leads to more accurate financial projections and better decision-making.

2. Increased Flexibility

With rolling forecasts, businesses can easily adjust their financial plans based on changing circumstances. Whether it's a shift in market demand, unexpected expenses, or new opportunities, companies can quickly update their forecasts to reflect the latest developments. This flexibility allows organizations to seize opportunities and mitigate risks more effectively.

3. Improved Strategic Planning

By having a continuous view of future performance, businesses can develop more robust strategic plans. Rolling forecasts provide valuable insights into upcoming challenges, potential bottlenecks, and areas of growth. Armed with this information, companies can align their resources, set realistic goals, and fine-tune their strategies accordingly.

4. Better Resource Allocation

Rolling forecasts enable businesses to identify areas where resources can be allocated more effectively. By understanding the financial impact of different initiatives, companies can prioritize investments, optimize budget allocation, and improve overall resource management. This leads to increased efficiency and better utilization of available resources.

5. Enhanced Stakeholder Communication

Rolling forecasts facilitate effective communication with stakeholders. With up-to-date and accurate financial information readily available, businesses can provide clear and transparent reports to investors, board members, and other stakeholders. This builds trust and confidence, fostering stronger partnerships and enabling more informed decision-making.

Implementing Rolling Forecasts - John Stretch's Approach

John Stretch's approach to rolling forecasts involves a systematic process that maximizes their effectiveness:

1. Establishing a Forecasting Team

Selecting a dedicated team responsible for managing and updating the rolling forecasts is essential. This team should consist of individuals with financial expertise, along with representatives from other relevant departments. Collaboration and effective communication within the team are key to successful rolling forecasts implementation.

2. Defining Forecasting Variables

Identifying key variables and drivers that impact the company's financial performance is crucial. This includes factors such as market trends, customer behavior, production costs, and competitive landscape. Understanding these variables allows for more accurate forecasting and better decision-making.

3. Regular Data Collection and Analysis

To ensure accurate and up-to-date forecasts, it's important to establish a robust data collection and analysis process. This involves collecting relevant financial and non-financial data, analyzing trends, and monitoring market developments. The forecasting team should continuously evaluate and refine the forecasting model based on new insights.

4. Collaboration and Continuous Improvement

Rolling forecasts thrive on collaboration and continuous improvement. Regular meetings with the forecasting team, department heads, and other key stakeholders allow for informed discussions and the identification of potential risks and opportunities. Feedback and input from different perspectives help refine the forecasts and drive strategic decision-making.

Managing with rolling forecasts has become an essential tool for any business aiming to thrive in a dynamic and unpredictable environment. John Stretch's expertise and innovative approach to financial management have shown that traditional budgeting methods are not enough to ensure success. By embracing rolling forecasts, companies can adapt to change, make accurate predictions, and drive strategic decision-making for long-term growth.

If you're looking to enhance your financial management capabilities, it's time to explore the benefits of managing with rolling forecasts.

Managing with rolling forecasts

by John Stretch (Kindle Edition)

4 out of 5

Language	:	English
File size	:	5881 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	122 pages
Lending	:	Enabled

FREE

The idea of budgeting for a year ahead was developed in a time of stable markets, static costs, and predictable inflation. It today’s rapidly changing world, managers can’t run their business with a one year fixed plan. Many leading organizations are changing to rolling forecasts to inspire and lead their organizations to better performance. Rolling forecasts direct management’s attention towards the future, and ensure that planning is ongoing as opposed to an annual exercise.
This book explains in practical terms how to design and implement a rolling forecast system. Many diagrams, practical examples and case studies illustrate how rolling forecasts work in practice, and how to use forecasts in management meetings.