What are the Benefits of Rolling Forecasts?
Today’s market volatility is driving increasing interest and adoption of rolling forecasts. In fact…
Today’s market volatility is driving increasing interest and adoption of rolling forecasts. In fact…
Many organizations are dissatisfied with their annual budgeting process. Many even dread it. Yet most organizations continue to support the annual ritual.
Recent economic conditions have elevated interest in rolling forecasts as means of coping with increasing uncertainty and volatility. Proponents believe that a faster and more forward looking process creates value by
Are these fads and fashions or the real deal? Are CFOs attracted to them as the shiny new toys they must have on their resume for their next bigger job and employer? My belief is these four “hot” managerial methods and tools are essential. But they need to be thought through and properly designed and customized; and not just slapped in willy-nilly just to have them as shiny new toys.
What are these “four hot tools”, you ask? Read on for insight by author Gary Cokins.
According to a recent survey (multiple surveys in fact) most organizations are still using Excel for budgeting. Part of the explanation for that, of course, is “it’s free”. But it’s also because we in Finance have a bias for spreadsheets. No self respecting accountant or finance professional would back down from the challenge of building a budgeting process using Excel (Bill Gates is smiling, I can feel it).
There are two primary purposes of budgeting. The one most people think of first is to put a cap spending. But that’s only one reason why organizations (and people) budget.
The other reason why organizations budget is to ensure what’s important gets done. And let’s face it, just because something is important doesn’t mean it will get done. Unless it’s properly resourced and funded, it won’t happen. So let’s examine that crucial link between budgeting and execution.
Instead of debating the relative merits of rolling forecasts over annual budgets, the right question to ask is “What’s the best way for us to plan in our organization?” Because maybe the answer involves elements of both.
I’ve had the distinct pleasure of working with some of the best run companies over the years and I’ve come to appreciate what really separates them from “the merely good”. Some of what makes great companies so successful, like hiring great talent, is quite obvious. But I’d like to share one of their lesser known secrets to their success.