A rolling forecast simply means that each quarter or month, a company projects four to six quarters or twelve to eighteen months ahead.

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Rolling forecasts won’t work if you create them from a bottom-up forecast every quarter – they need to be driver based.

This provides flexibility in the planning process and agility when you re-plan or create alternate plans.

In addition, over time forecasts will also start to use consistent models and model drivers.

As an example, sales units should drive production volumes.

It also helps managers focus on what is really important.

Over time, some of the drivers will be replaced if they are found as an inconsistent predictor of results and the stronger drivers will evolve to KPIs and used for goal setting.Understand your objectives of creating a rolling forecast.This will drive all of the other best practices related to rolling forecasts.There are a number of questions: As a starting point, make sure your forecasting time frames are consistent with your business cycle and business needs.If sales 15 months from now are dependent on capital expenditures today, it is important to create rolling forecasts out past 15 months.It also helps them assess next steps in their execution of their plan, understand critical pivot points in the plan and better judge the impact the economy may have on their plan.