How often should I update a rolling forecast?

Monthly is the gold standard. Each month, lock the actuals, update the remaining forecast months, and add a new month at the end to maintain the 12-month horizon. Some companies update quarterly if monthly is too resource-intensive.

Who should own the rolling forecast?

FP&A owns the process and consolidation, but department heads should own their own forecast inputs. This ensures the forecast reflects on-the-ground reality rather than top-down assumptions.

How do I handle seasonality in a rolling forecast?

Build seasonal adjustment factors into your model based on 2-3 years of historical data. Apply these to your baseline trend when projecting forward months. Update the factors annually as your seasonal patterns evolve.

What tools do I need for a rolling forecast?

At minimum, you need a model that can blend actuals and forecast in the same view, with the ability to lock periods and re-forecast forward months. Grove FP handles this natively with automatic actuals import and period locking.

Example

Rolling Forecast Example

A 75-person professional services firm in Birmingham with £3.8M revenue. The CFO has moved from static annual budgets to a rolling 12-month forecast that is updated monthly. This view shows the March update with Jan-Mar actuals locked.

Example data

Financial model

P&L Line

Jan (A)

Feb (A)

Mar (A)

Apr (F)

May (F)

Revenue

£310k

£325k

£298k

£340k

£355k

Direct Costs

(£155k)

(£163k)

(£149k)

(£170k)

(£178k)

Gross Profit

£155k

£162k

£149k

£170k

£177k

OpEx

(£98k)

(£101k)

(£97k)

(£105k)

Operating Profit

£57k

£61k

£52k

£65k

£72k

Cumulative

£57k

£118k

£170k

£235k

£307k

Mar (A)

March actuals came in below forecast due to a delayed project start. The forward forecast has been adjusted upward to reflect the deferred revenue recognition in Q2.

Operating Profit

Operating margin improves from 18% in Q1 actuals to 20% in the forward forecast, reflecting planned cost efficiencies and higher utilisation rates.

Cumulative

Cumulative tracking shows the business is on pace for £820k annual operating profit, 4% ahead of the original annual budget.

Formulas

Key formulas

fxForecast Revenue = Prior Month Actual * (1 + Trend%)

Forward months are projected from the latest actual, adjusted for seasonal patterns and known pipeline. This avoids the anchoring bias of static budget figures.

fxDirect Costs = Revenue * 50%

For a services firm, direct costs (mainly consultant salaries) track revenue closely. The 50% ratio reflects a 50% gross margin target.

fxCumulative = SUM(Operating Profit, Jan:Current Month)

Running cumulative profit helps track progress toward the annual target and identify when you are ahead or behind plan.

Analysis

What makes this example good

Clear visual distinction between actuals (A) and forecast (F) periods

Monthly granularity allows quick response to variances

Cumulative row provides running progress toward annual targets

Forward months reflect latest intelligence, not stale budget assumptions

Rolling horizon means the business always has 12 months of forward visibility

Customisation

How to adapt for your business

Extend to show all 12 months if your board prefers the full rolling view

Add a "vs Original Budget" variance row to show forecast drift

Include a confidence indicator (high/medium/low) for each forecast month

Break out revenue by client segment or service line for more granular forecasting

Add a cash flow row to complement the P&L view

Common variations

--18-month rolling forecast for businesses with longer planning cycles
--Quarterly rolling forecast for smaller teams with less capacity for monthly updates
--Revenue and headcount-only rolling forecast for fast-growing startups
--Three-scenario rolling forecast (base, upside, downside)

Keep exploring

Related examples

Annual Budget Example

A 120-person B2B software company based in Manchester with £5.2M annual revenue. The business sells a subscription product to mid-market companies and is forecasting 18% growth this year. The finance team is building the annual budget for FY2026.

View example

Q2 Reforecast Example

A 95-person healthcare company in Bristol with £7.5M revenue. After Q1 actuals came in 8% below budget on revenue, the CFO is conducting a Q2 reforecast. The reforecast updates the full-year outlook while preserving the original budget as a baseline for performance measurement.

View example

Budget vs Actual Variance Report Example

A 60-person marketing agency in London with £4.1M revenue. The Head of Finance produces a monthly BvA (Budget vs Actual) report for the leadership team. This March report shows YTD Q1 performance against the annual budget.

View example

FAQ

Frequently asked questions

A budget is set once per year and remains fixed as a baseline. A rolling forecast is updated monthly (or quarterly) and always extends 12 months into the future. The budget is your target; the rolling forecast is your best current estimate of what will actually happen.

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