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October 29, 2015 at 10:55 pm #993158ThexArmMember
- Total posts: 253
Hi Biz owners,
Just wanted to get your take on rolling forecasts. Do you do it in your business?
If not rolling forecasts, do you do any other kinds of forecasting for your business activities??
Also, if you could share whether it has been useful to do it.
Happy to share information on it for those who wants to know a bit more about it.October 30, 2015 at 2:52 am #1189995bb1Participant
- Total posts: 4,485
A little left field, but I definitely do the weather forecast on a rolling basis, and need to review and change tactics on a daily basis, based on the strange results thrown up by some super computers.
When I first did a Forecast for this Wednesday, on the 10 day forecast, 10 days prior, my estimation on the total income for Wednesday was set to $0, as at that stage the bureau were predicting up to 10mm of rain. As the 10 days rolled on, my predictions slowly moved up as the forecasts changed. To the point where one day out my forecast was predicting and $1100 day. In the end it turned out to be a $1154 day.
So yes I do use rolling forecasts, and I can show that the predicted outcomes can change on a daily basis.October 30, 2015 at 4:44 am #1189996ThexArmMember
- Total posts: 253
Appreciate you sharing. Do you only forecast income side of the things? I can see from your post that your rolling forecast range for revenue is 10 days. Can I ask you what was your reason for taking 10 day range for your forecasts?
Rolling forecasts are great, in that it forces owners/managers to continuously look further into the future and come up with alternatives to meet targets.November 7, 2015 at 1:10 am #1189997BradTurvilleMember
- Total posts: 55
Our business clients all have rolling forecasts (multiple scenarios) and they find it makes the ever common confusion around cashflow cycles a lot clearer. The dashboard is in the cloud and plugs into Xero and updated every few hours so it’s basically real time.
Really powerful for visualising what a strategic change in the business could transpire to. Fore example, I’m putting a property developer on next week who has two developments and we can forecast both using their budgets and timelines, taking into account the ability to draw down on bank loans and investor funds and if an unexpected change in timeline or budget occurs we can easily factor in and see how they impacts future short term cashflow.
Also this time of year, being Christmas, many businesses experience seasonable fluctuations. Lawyers for example close the office for a good month. But retail and hospitality are ever busy. They need more staff and usually have a spike in revenue. This then leads to a much larger BAS and super for this period and a forecast will show what funds need to be available come end of February to service these payments.
You are 100% right about forecasts forcing the conversation towards future goals. Most business owners are only ever looking at a BAS or income tax return which is reviewing the past.
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