About Rolling Forecasts

In a traditional forecast, the forecast cycle is always tied to the fiscal year end, and the months in the forecast period keep reducing as the months in the fiscal year progress.

Rolling forecasts differ from traditional forecasts in that they are continuous without regard to the annual fiscal year end period. The periods in a rolling forecast roll along based on the predefined window for the rolling forecast. The periods are generally defined on a monthly or quarterly basis. Monthly rolling forecasts are generally in 12-month, 18-month, or 24-month cycles. In a 12-month cycle, the 12-month period constantly shifts each month, and every month the forecast is for the next twelve months without regard to the actual fiscal year end.

For example, assume a company has a fiscal calendar for July through June. In the first month of year (Jul, FY11) the company’s users fill in the forecast scenario for the periods Jul 11 – Jun 12. In the next month (Aug 11), the users again fill in the forecast scenario with numbers for the next 12 months (Aug 11- Jul 12), even though the period of Jul 12 pertains to the next fiscal year of Jul FY12-Jun FY13.

Following are some examples of rolling forecasts:

Figure 24-1 12-Month Rolling Forecast

Figure 24-2 Quarterly Rolling Forecast

Figure 24-3 Quarterly Trailing Rolling Forecast (Rolling Quarters with a Cumulative Total)

Figure 24-4 Rolling Forecast Where There are Additional Segments for Actual and Plan Year