The Best Budgeting Software for Rolling Forecasts
Budget. The word we all love to hate. Finance teams spend countless hours developing one, only to discover the market has changed and their hard work is outdated.
This means companies are stuck with de facto yearlong contracts they can’t possibly fulfill due to the evolving conditions around them. Fortunately, there’s a way to break free of outdated budgetary constraints: rolling forecasts.
Instead of being once-a-year exercises, rolling forecasts happen on a regular cadence and involve ongoing planning and analysis. Unlike budgets with hundreds or thousands of line items, they focus on key business drivers. And rather than focusing on the past, rolling forecasts act as early warning systems when you’ve drifted off course.
Business Budget Software: 5 Steps for Successful Rolling Forecasts
If you’re ready to leave behind static spreadsheets and move to more active planning with the best budget software, consider these five steps to launch rolling forecasts successfully at your organization:
- Use a dedicated application, such as Adaptive Insights. The multiple versions required by good rolling forecasts to create different scenarios are extremely difficult to perform and manage with spreadsheets without CPM software.
- Model your course on drivers, not details. Your annual budget lists thousands of line items, but you need to perform rolling forecasts at a much higher level. Focus on significant business drivers such as risk, profit, and working capital.
- Use rolling forecasts to sound out multiple what-if scenarios. Look for a tool that lets you change a few key assumptions and drivers and instantly see their effect on the overall plan, such as the impact a price change has on headcounts and cash.
- Scrub your forecasting process of bias—don’t link it to targets, measures, or rewards. Rolling forecasts are a strategic management tool, not an evaluation tool. Let managers forecast based on real business demands and the real business environment.
- Choose the right forecasting horizon for your industry. A best practice is to forecast at least four to eight quarters past the current quarter’s actuals. Of course, there’s no hard-and-fast guideline for the time interval included in a rolling forecast. It depends on your industry, your business needs, and how long it takes to make decisions.
Break free of the budget with Arxis and Adaptive Insights
If you’re still not convinced about the need for rolling forecasts, consider these compelling reasons for giving them a try:
- They enable agile responses to changing market conditions.
- They optimize decision-making for better planning.
- They identify future performance gaps.
- They help senior executives manage performance expectations.
- They shorten long planning cycles with a more efficient model—and direct the extra time toward more strategic activities.
With Adaptive Insights and the experts at Arxis Technology making the switch to rolling forecasts has never been easier. Together, we’ll help you toss off the shackles of annual budgets and achieve your company’s financial goals.
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Arxis Technology, Inc.
Arxis Technology, Inc. is an ERP technology consulting firm specializing in the implementation and support of accounting and business management software, and custom application development. As ERP consultants and resellers for Intacct Cloud Financials, Adaptive Insights CPM, and other best-in-class finance and accouting automation solutions.
