Beyond Budgeting: The Case for Rolling Forecasts
Beyond Budgeting: The Case for Rolling Forecasts

Recently I had the opportunity to hear my CEO, Ken Wolf, speak at the New Jersey Chapter of Financial Executive Internationals on the much debated topic of rolling forecasts. A former accountant, self-proclaimed rolling forecast advocate, and CEO of a performance management software company, I knew this topic was quite familiar to him.

As the members of FEI gathered at their Morristown, NJ headquarters for the April peer-to-peer breakfast forum, I had a feeling that this morning’s session was going to be one that nearly everyone in the room had experienced at some point in their careers. To begin, Ken listed off some of the challenges of traditional budgeting:

  • It is quickly irrelevant and outdated when published
  • It triggers unnecessary spending
  • It is time-consuming and costly
  • It sub-optimizes organizational behavior and results

In a boardroom full of CFOs, all were in agreement of these pains, yet the majority of them still use traditional budgeting. Why? A better solution to the annual budget is out there and many CFOs including the ones in this room knew about it, so how come so many are still stuck on the “as-is” annual budget?

Well, just to review, a rolling forecast is the process of simulating profit and loss for a company on a rolling basis. By taking this approach, companies avoid the above challenges and in turn receive many benefits including flexibility, the ability to plan based on drivers, and setting long term goals without managing short term goals against them.

However, Ken went on to describe that implementing a rolling forecast is not something that happens overnight and is not something that should just be jumped into. Companies that have moved to a rolling forecast will likely tell you that they have had both the traditional budget and the rolling forecast before solely transitioning to the rolling forecast. They will also tell you that a cultural change will need to take place. But in the end they will tell you that it is one of the best decisions they made for their company.

Is the traditional budgeting process holding your company back? What negative behaviors have you seen when it comes time to produce the annual budget? Like the CFOs at this meeting, can you relate to the above budgeting pains and have you thought about moving to a rolling forecast?

To learn more about rolling forecasts and to set up a complimentary needs analysis with one of our rolling forecast experts, please contact me at


Read more about rolling forecasts:

Rolling Forecasts: Pitfalls and Steps to Success 

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