Rolling Forecasts: Practical Steps, Benefits, and How to Get Started

Financial planning has changed. Traditional annual budgets can’t keep up with rapid shifts in the market, evolving customer needs, and internal performance dynamics. That’s why many finance teams are turning to a rolling forecast model, a more flexible and responsive approach to planning that updates throughout the year.

In this guide, we’ll walk through what a rolling forecast is, why it matters, how it compares to static budgets and the practical steps to implement one. If your organisation wants to make smarter, faster decisions, this might be the change you need.

What Is a Rolling Forecast?

A rolling forecast is a continuous planning process that adds a new future period as the most recent period ends. It is usually done monthly or quarterly. Rolling forecasts:

• Always look ahead and move forward as time passes

• Use the latest results and information right away

• Keep updating plans and guesses often to stay accurate
   

Instead of committing to a rigid plan once a year, you’re creating a living model that evolves with your business. This means more agile planning that helps you respond proactively to change.

Rolling forecasts have become increasingly relevant as businesses face more frequent and unpredictable shifts. They enable teams to stay aligned and adjust course quickly.

Rolling Forecast vs. Static Budget

Most companies still rely on static budgets: fixed plans built months in advance and rarely revisited. However, static models often don’t reflect the unexpected situations that come up in daily operations.

On the other hand, rolling forecasts:

• Remain relevant throughout the year

• Are updated based on real-time data

• Help you make more rational decisions
   

Static budgets can be too rigid, leading to spending that doesn’t match reality, missed chances or last-minute cuts. Rolling forecasts, on the other hand, make planning more flexible and help keep financial goals aligned with what’s actually happening in the business.

Benefits of Rolling Forecasts for Financial Planning

The transition to a rolling forecast model can have significant value across your organisation. Let’s break down the key benefits of rolling forecasts in financial planning:

Improved Risk Analysis

Since data is refreshed more frequently, potential risks are easier to detect early. That means finance leaders can take corrective action before issues become more costly or disruptive.

Better Accuracy in Planning

Frequent updates based on the latest actuals lead to more accurate forecasts. This helps reduce the margin of error and builds greater confidence in financial decision-making.

Faster Decision-Making

With rolling forecasts, current data is readily available to you, so you don’t need to wait for year-end reviews to make strategic calls. It makes it easier to react quickly and make smarter decisions in real time.

Enhanced Flexibility and Responsiveness

The ability to revise projections mid-year is one of the biggest advantages of rolling forecast budgeting. When something changes, whether it be demand spikes, supply chain disruptions or market shifts, you’re not stuck with outdated assumptions.

Long-term Visibility Across Fiscal Years

Because the model looks beyond the current fiscal year, leadership can identify trends, plan for upcoming investments and align operational decisions with long-term goals.

How to Create a Rolling Forecast

Getting started with a rolling forecast doesn’t have to be overwhelming. Follow these steps to build a process that works for your organisation:

1. Define Objectives

Start by being clear on what you want your forecast to do. Is it about hitting revenue goals, keeping costs in check or supporting bigger strategic plans? That purpose will shape how you build and focus your model.

2. Set Timeframe and Frequency

Decide how far into the future your forecast will extend and how often it will be updated. Many organisations use a 12- or 18-month rolling window, refreshing it monthly or quarterly.

3. Identify Contributors and Value Drivers

Determine who will be involved in the process (e.g., finance, sales, operations) and what performance drivers they will track (e.g., product demand, pricing trends or staffing costs).

4. Verify Data Sources

Next, make sure you’re working with clean, reliable data. Your forecast needs to be as accurate as possible and reflect your current business standing.

5. Run Scenario Analysis

Use scenario planning to test how different variables might impact results. This helps prepare for unexpected situations and gives you context when assessing strategic choices.

6. Measure Variance and Adapt

Compare your forecast to what actually happened, then dig into the differences. Use what you learn to tweak your assumptions, sharpen your forecasting and improve planning across teams

Rolling Forecast Best Practices

Building a successful rolling forecast process isn’t always a simple step-by-step task. There may be more variables to take into account depending on the business. Here are some best practices that will help you create a functioning forecast:

• Link to strategic goals – Make sure your forecast supports where the business is headed based on your progress so far.

• Integrate into day-to-day operations – It should be part of how you run the business, not just a finance exercise done once a quarter.

• Promote cross-department collaboration – Get input from across the company so your forecast reflects what’s really happening on the ground.

• Automate and update regularly – The fewer manual steps involved, the easier it is to keep your forecast current and useful.

• Choose the right technology – The right tools can make the whole process faster, more accurate and easier to scale.

Choosing the Right Rolling Forecast Software

Technology plays a key role in keeping rolling forecasts running smoothly. Manual work slows things down, leads to errors and gets harder to manage as the business grows. The right software helps you stay efficient and keep things on track.

Benefits of using modern tools include:

• Automatic data updates from ERP and BI systems – You get real-time numbers without chasing spreadsheets or waiting on reports.

• Built-in workflow and version control – Everyone stays on the same page, and you avoid confusion over which version is the latest.

• Easy scenario modelling and visual dashboards – You can quickly test different assumptions and see the impact at a glance.

If your organisation is considering an upgrade, Mercur’s planning platform offers powerful forecasting capabilities with pre-built connectors and enterprise-level performance.

Is It Time to Replace Your Budget with a Rolling Forecast?

If your financial planning process feels out of sync with business demands, it might be time to adopt a rolling forecast. It brings better accuracy, real-time insights and flexibility across your organisation.

Start by evaluating your current tools and processes. Think about where your static budget is falling short and where rolling models could help your team respond more quickly.

Book a demo to see how Mercur supports rolling forecast automation and eliminates the costs of traditional budgeting.

Rolling Forecast FAQs

What is a rolling forecast?

It’s a financial planning model that updates projections regularly and extends the forecast window with each new period. It’s more flexible and responsive than traditional budgeting.

How do you create a rolling forecast?

You start by defining your goals, setting a time window, involving the right teams, verifying data quality, running scenarios and measuring results against actuals.

What’s the difference between a static and rolling forecast?

A static budget is created once a year and doesn’t change. A rolling forecast updates frequently and reflects ongoing performance, making it better suited for fast-changing environments.

What is an example of a rolling forecast?

A company forecasting sales for the next 12 months will update this forecast monthly. When one month ends, another is added, so there’s always a forward-looking 12-month view.