You do need a few key ingredients to get a reliable rolling forecast underway, but it can be much less daunting than most people might think
People and culture: The process needs drivers. Most important amongst these is commitment from top management and some enthusiastic champions amongst the accounting and operations team.
Process: The monthly process must be well defined, understood and enforced. To be effective, a forecast should not be too detailed. Wherever possible forecast costs should be driven by business activities and physical measures. A good external consultant can offer great value in this area.
Good Tools that support the process: Your software needs to support fast, easy and timely data changes. If it takes each cost owner more than a few hours per month to update, then it is highly unlikely to happen. Many cost effective alternatives to Excel are available in the marketplace.
Engagement: If this is to work, then forecasting cannot remain the domain of the accounting department. The real owners of the costs must become an integral part of planning the costs. If you can create the previous 3 items then cost owner engagement becomes an outcome.
For over 15 years Ramesys Global has been helping clients to create quality rolling forecasts. We love to talk about our experiences. If you would like to find out more give us a call or email, or click the link below.
Read more: Confidence in Forecasting