The power of a rolling forecast

Imagine you’re hiking a trail in the mountains. Instead of just checking the weather forecast once in the morning, you keep an eye on it throughout the day. Early afternoon arrives, and you see a storm coming sooner than expected, so you change your route. By the time thunder and lightning roll in, you’re safely at home—watching the light show from your window.

Rolling forecasts work the same way in business. Instead of sticking to a single, fixed plan for the year, predictions are continually updated to reflect the latest information. This continuous steering helps you tackle shifts in the market and economy before they become major problems.

According to Jason Krenske, Ulton’s Business Advisory Partner, the pace of change today is unlike anything we’ve seen before. Jason has spent over 20 years helping clients with financial forecasting and has watched business landscapes go from steadily evolving to shifting at breakneck speed.

“Ten years ago, the landscape would change, but the pace was slower. Nowadays, the pace of change is just so dramatic—and it seems to be getting faster and faster,” says Jason.

The difference now, Jason points out, is that businesses no longer have the luxury of sticking to a single plan set months in advance. From the crowded competitor landscape to evolving consumer preferences, factors at play inside and outside your business can change overnight.

“In the past, you might have been able to lock in a budget for 12 months. Now, that approach isn’t going to be enough to keep things on track, because so much changes in that time,” he says.

To move forward with confidence in your financial plans, you need a forecasting method that’s as dynamic as the environment you operate in. This is where rolling forecasting comes in. The rolling forecasting is a method for updating your projections with real-world shifts, keeping your financial plans anchored in on-the-ground reality.

Rolling forecast method explained

A rolling forecast uses a system of adding and dropping time periods. As soon as one month (or quarter) finishes, that period is removed from the forecast and replaced with another period further in the future. For example, a 12-month rolling forecast might begin in July 2025 and run through June 2026. When the actual results for July 2025 are finalised, that month is dropped and replaced by July 2026. In this example, the forecast always covers 12 months, but it slides forward each time the latest actual data becomes available.

A proactive perspective

A key advantage of rolling forecasts is that they keep your focus firmly on the future. By updating forecasts regularly, you can see how fresh data—such as revised sales expectations or production costs—might impact your finances before problems escalate. This future-focused perspective helps reveal issues like looming cash flow gaps or unexpected expense spikes early in the piece.

“We get a whole lot more value out of forward-looking,” Jason says.

“We do the budget versus the actuals. We look at the rolling forecast and review where we’re aiming to be in a few months’ time. Then, we take all of this information and say ‘OK, that’s where we’re wanting to be down the road, so where are we expecting to be next month?’

“We’ve now got our new actuals in there, but we’ve also got updated forward sales expectations because things have moved. We’re constantly looking to the future and pinpointing where we’ll be. And that helps you make more informed decisions,” he says.

“Through this process, you can identify any potential issues early. Let’s say we identify through the forecast that in two months’ time, we might be in a position where we’re under cash flow pressure or unable to service our debt. Because we’ve registered this before the fact, it gives us a chance to address it early—seek out new opportunities or negotiate with banks,” Jason says.

“It gives us the chance to take proactive action, rather than focusing on the past,” he says.

Getting the systems rolling

Several practical considerations go into setting up a rolling forecast and making sure it supports meaningful decision-making. As an external CFO, Jason works closely with his clients to set the following parameters.

Determining the timeframe

While 12 months is the most common timeframe for a rolling forecast, the most suitable rolling window depends on the individual business and their unique circumstances.

“In 80% of cases, we work on a 12-month window. When we get close to the new financial year—we’ll extend that window by another 12 months,” says Jason.

However, Jason notes this isn’t always the case.

“Take one of our clients, for example. They provide their products to the government, and these delivery contracts mean they’re operating on a much longer timeline,” he says.

For that client, a three-year rolling forecast is more appropriate, because it aligns with the contracts they’re trying to secure and deliver against. The correct timeframe is one that makes sense for your specific business and context.

Identifying the right drivers

An effective forecast factors in which operational levers can steer a business’s numbers. For a professional services firm, that might be efficiency and billable hours; for a manufacturer, it could be production costs, inventory, or sales volumes. Once you identify these drivers, each month’s actuals can be plugged in and tested against your assumptions.

As soon as you notice a spike or dip in a driver, you can adjust the forecast to see the impact on cash flow and make informed decisions from there.

Jason stresses the power of linking forecasting to the correct business drivers. He illustrates this with the following example:

A production business identifies inventory as a business driver.
They recognise that it’s taking longer and costing more to produce the product and currently, the product isn’t selling at the rate they expect.
Because of this, the inventory value goes up.
Jason and his team can update their models with revised assumptions to clearly demonstrate how replacing a faulty piece of manufacturing equipment would directly affect inventory production.
With this guidance, the business is able to focus on the area that will truly solve their problem.

Using the right tools for the job

One of the most common criticisms of rolling forecasts is that they require a lot of manual work—constant spreadsheet updates and seemingly endless data entry. However, that doesn’t have to be the case. By using the right digital tools, you can streamline the forecasting process and reduce the burden on your team.

“The software we use depends on each client’s needs,” says Jason.

“Sometimes it’s as simple as integrating APIs or data feeds so you’re not needing to double up on manual data entry. It makes forecasts more accurate and frees up staff time for higher value tasks,” he says.

Having the right tools also helps maintain data quality. Automated data flows and real-time updates makes sure that the figures you’re working with are current. This level of accuracy is a huge advantage, given how fast the business environment can shift.

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Rolling forecasts offer a proactive way to plan. Rather than relying on a once-a-year budget, you continually refresh your financial outlook based on real-time drivers and changing conditions. With the right partner to guide you, the right foundation to support you, and the right tools at your disposal, rolling forecasts give you the ability to make informed decisions earlier.

You’ll see the storms coming before they strike, modify your path, and stay on course—even when conditions shift around you.

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