The 10 benefits of quarterly rolling forecasting process

By David Parmenter

The benefits include:

Macro view

Rolling forecasts allow for more accurate and versatile financial forecasting that will remain true to a company, even amid fluctuations in the industry, economy, or marketplace.
Businesses can continually adapt future forecasts to reflect industry, economic, and business changes, enabling them to reduce risk and allocate resources more optimally in pursuit of their financial objectives
Businesses can be more opportunistic in their decision-making because they’ll have the ability to tweak their business assumptions, alter budget allocations, and adjust their spending more quickly, enabling them to better respond to industry and consumer demands.

Micro view

The funding of budget holders is now done on a quarterly rolling basis, once their forecast has been approved, rather than annually.
Monthly budgets to be used for month-end reporting are set only one quarter ahead.
Managers have a better understanding of their operations
An updated annual forecast P/L as a by-product, every quarter, and not a separate monthly exercise as part of the financial report
The next financial year is always in view
Because it is done 4 times a year at a higher level it is a massive time and thus cost saver compared to the time for annual planning and forecasting updates.
Helps create a better understanding of the cost drivers leading to full recover of raw material cost fluctuations.