Definition
A rolling forecast is based on historical data and used by companies as part of their financial models to predict their future performance over a continuous period. While static budgets forecast a specific period in the future, a rolling forecast has to be constantly updated to reflect changes.
Example
Rolling forecasts are commonly used for a minimum of 12 forecast periods. Some companies may use these for 18, 24, 36, or more months.
Why it matters
Rolling forecasts can allow more flexibility to companies since these offer a "rolling window" of future performance. This means that the data can be adjusted as new information becomes available to the financial department. This increases the scope for dynamic business decisions as per the most up-to-date data.