The business environment is volatile and always changing — sometimes in ways that test your patience and make you question yourself as the leader of a top-performing organization. All CEOs face challenges like these, and you want to be the kind of CEO who leads the team to the end with excitement of competition, instead of fear of it. Annual budgeting and planning could lead you through that fight, but there is even more you can do to become competitive with the top organizations.
With rolling forecasts, the age of traditional budgeting and questioning strategic decisions is gone. A rolling forecast looks ahead for you, acts as your guiding light, and foresees the risks and opportunities that stand before you.
Six reasons CEOs should choose rolling forecasts9DOTS_Forecast-520x330
1. They enable a consistent, accurate, forward-looking financial outlook. In today’s volatile world, the CEO is always struggling for answers to the “variance.” In fact, most organizations have a monthly letter dedicated to it, known as “Management’s Discussion and Analysis.” This monthly writeup is dedicated to the explanation of variances among accounts. The variance cuts a huge swath in the financial outlook because the budgeted data may not have been accurate based upon last year’s history or change. This sends the finance and accounting team spiraling and provides information to the CEO that is at best a month old. The CEO answers to banks, investors and a multitude of others who are looking for accurate forward-looking statements. Rolling forecasts provide the ability to do this. Along with the dynamic ability of the monthly forecast, there is the ability to minimize true variances to the ones that truly matter for research and understanding. This provides you with sound financial judgement for the coming months.