Quick Answer
Most finance teams should reforecast quarterly at minimum, with monthly reforecasts recommended for fast-growing or volatile businesses. Rolling forecasts that extend 12-18 months ahead are increasingly replacing static annual budgets. The right cadence depends on your business volatility, decision-making speed, and the effort required to produce each reforecast.
Your annual budget becomes stale the moment it is approved. Market conditions change, deals slip, hires happen earlier or later than planned. Reforecasting updates your financial outlook based on what has actually happened, giving leadership a realistic view of where the business is heading.
Monthly reforecasts are ideal for high-growth companies, SaaS businesses, and PE-backed firms. They provide the tightest feedback loop between actual performance and forward projections.
Quarterly reforecasts are the most common approach. They balance effort with freshness and align with quarterly board reporting cycles.
Rolling forecasts extend 12-18 months ahead and shift forward each month or quarter. Unlike fixed reforecasts (which only update the remaining months of the budget year), rolling forecasts always provide a consistent planning horizon.
Focus on material changes: - Replace budget assumptions with actuals for completed months - Update revenue pipeline based on current CRM data - Adjust headcount timing for hires that have slipped or accelerated - Revise cost assumptions where new information is available - Recalculate cash flow and runway based on updated P&L
The biggest barrier to frequent reforecasting is the time it takes. If your budget lives in spreadsheets, each reforecast means hours of manual updates and consolidation. FP&A software like Grove FP pulls actuals automatically, recalculates formulas in real time, and produces updated reports in minutes rather than days.
UK-listed companies typically reforecast quarterly to align with interim reporting requirements. Private companies increasingly adopt monthly rolling forecasts, particularly those backed by private equity where monthly reporting packs are standard.
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FAQ
A reforecast updates your existing annual budget with actual results and revised assumptions for remaining months. A rolling forecast extends continuously — adding a new month or quarter as each one completes — so you always have 12-18 months of forward visibility regardless of your fiscal year.
With FP&A software, a monthly reforecast should take 1-2 days. In spreadsheets, it typically takes 1-2 weeks. If your reforecast takes longer than a week, consider investing in planning tools to automate the consolidation and recalculation steps.
Reforecast both. Revenue changes cascade through your entire P&L — affecting gross margin, contribution, and ultimately cash flow. Reforecasting only costs gives you an incomplete picture and can lead to poor resource allocation decisions.
Many companies are moving away from traditional annual budgets in favour of rolling forecasts with annual targets. However, an annual budget still serves as a useful commitment baseline for board approval and compensation targets.
Show budget vs actual vs reforecast in a single view. Highlight the key variances, explain the drivers behind changes, and quantify the full-year impact. Include scenario analysis showing the range of possible outcomes.
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