Reforecasting (or budget flexing) and rolling forecasts (or continuous budgets) are much used in service companies and are modern tools that update financial management and introduce agility into the traditional budgeting cycle. Let's take a look at these advanced and indispensable forecasting techniques in management by project.
All about rolling forecasts
This is a management planning technique that makes it possible to think ahead and improve reliability. The forecast is carried out in a rolling manner over a given period (often twelve months). It makes it possible to manage business, adjust objectives in real time and take rapid corrective action on any variants. It is now regarded as the most efficient, fastest and cheapest way to readjust business with precision.
The rolling forecast is an indispensable budgeting tool in management by project and, in some ways, is a kind of management tool that becomes more precise over time. The rolling forecast reduces time between the revision of a company's objectives and the renegotiation of the measures implemented and resources allocated for their achievement, resulting in faster, more effective and more accurate corrective and preventive actions.
All about reforecasting
This is a projection designed to anticipate the way in which a project or a year will end. Reforecasting is also known as budget flexing or budget at completion. Unlike forecasts, it is associated with the project concept and is widely used in service companies organised by project.
In general, we add the services carried out to those still to be done in order to get a realistic picture of reforecasts. Depending on the results, it will be possible to predict the corrective actions required to guarantee the margin.
Thus, the revised estimate of the budget is necessary for the implementation of a rolling forecast in a company. In fact, it's the reforecast that will provide the basis for calculations of projects in the forecast.
In management by project, the revised estimate of the budget for each project is essential to creating a rolling forecast covering all projects.