How Rolling Forecasts Can Provide More Clarity

Some of the greatest economic concerns brought on by the pandemic has been financial instabilities and volatility. These pressing issues have forced a stark lesson in pre-planning and have put the spotlight on the weaknesses of traditional budgeting and forecasting methods. In this new unstable environment, annual budgets quickly become cumbersome to prepare. Sudden economic fluctuations have forced the manufacturing industry to develop new tools in budgeting to remain dynamic and adaptable to change. The Rolling Forecast Model is quickly becoming the tool of choice.

Related Read: Five Planning Strategies in Uncertain Times

STATIC VS. ROLLING

The traditional static budget is viewed as a once-a-year process that may not give a clear understanding of missed goals or a plan for future success. Once the annual budget is set, managers may not compare actual to forecasted performance until year end. Other complications arise if the budget takes longer to complete and