How to create rolling forecasts (and why you need them)

If you're running the finances for an international business, you probably feel the pain of annual forecasts veering off track before Q2 even starts.

Currency swings, supply chain shifts, and market changes make static plans obsolete fast — and the further you get from your planning cycle, the less your numbers reflect reality.

Rolling forecasts offer a different approach.

Instead of setting projections once and hoping everything stays consistent throughout the year, you continuously update your financial outlook so you're always working with a realistic view of the next 12 months. No more clinging to assumptions you made back in October or having to explain why actuals aren’t matching the forecast mid-year.

In this guide, we'll cover what rolling forecasts are, why they matter for international businesses, the different models you can use, and how to build one step by step.

What is a rolling forecast?

A rolling forecast is a financial planning method where you continuously extend your projection horizon as each period closes.

When one period ends, you drop it from the forecast and add a new period at the end — always maintaining a consistent forward view.

Unlike a traditional annual forecast that's set once and left relatively unchanged, a rolling forecast gets updated monthly or quarterly with fresh data, so your projections reflect current business realities rather than outdated assumptions.

The "rolling" part means your forecast window stays constant. If your rolling forecast stretches 8 months into the future, you always have 8 months of forward visibility regardless of where you are in the fiscal year.

This approach typically focuses on key business drivers — revenue, costs and cash flow — rather than every line item, making it faster to update and more actionable.

For international businesses, rolling forecasts are especially valuable because they let you incorporate real-time changes in exchange rates, supplier costs and market conditions into your financial planning.

Why static budgets fail international businesses

Static annual budgets assume the world will stay roughly the same for 12 months. That assumption falls apart quickly when you're dealing with multiple currencies, international suppliers, and global market conditions.

Annual budgets can't keep up with currency volatility

Exchange rates move constantly, and even small shifts of 1–2% can dramatically impact your bottom line on larger transactions.

When you prepare an annual forecast in October using that day's exchange rates, you're essentially guessing at what exchange rates will look like in June. A supplier invoice that looked profitable when you built the forecast can flip to a loss by the time payment is due, purely because of currency movements that were entirely outside of your control.

Unlike static budgets, rolling forecasts allow you to update those assumptions as rates shift throughout the fiscal year.

The hidden cost of forecasting with unknowns

Beyond currency exchange rate volatility, international businesses also have to manage multiple different variables that static budgets can't handle. Think shifting freight costs, tariff changes, supplier price adjustments, and market-specific demand fluctuations.

The real trouble comes in the decisions you make based on those static numbers. If your static forecast drives hiring plans, inventory purchases and market investments that prove wrong because you built them on stale assumptions, that’s a problem. And by the time you realise it, you may have already committed resources in the wrong direction.

Rolling forecasts solve this by treating uncertainty as a feature rather than a flaw. You build in regular checkpoints to update assumptions and adjust course before small variances become big problems — improving forecast accuracy with each cycle rather than waiting for year-end to discover what went wrong.

Two approaches to rolling forecast models

Rolling forecasts typically fall into two categories based on how much historical data versus future projection they contain. Your choice depends on whether you prioritise strategic visibility or near-term accuracy.

Extended horizon forecasts (3+9, 4+8)

A 3+9 rolling forecast model means you have 3 months of actual data plus 9 months of projected data, always totalling 12 months of visibility. And a 4+8 forecast is the same, just with 4 months of actuals and 8 months of projections.

Extended horizon models give you more forward-looking runway, which is useful for strategic planning, resource allocation, and longer-term decision-making.

The trade-off is that you're projecting further into the future with less historical context, so accuracy naturally decreases the further out you go.

These models work well for businesses that need visibility into next year while still in the current fiscal year — particularly for finance leaders who need to plan headcount or capital expenditure well in advance.

Near-term forecasts

Near-term models prioritise accuracy over horizon; with more actual data to anchor your projections, your forecasts tend to be more reliable.

These models are useful when you need tight operational control and accurate short-term cash flow projections. The trade-off is reduced strategic visibility since you're not looking as far ahead, which can limit long-range planning.

Which approach works best for your business?

It depends, of course.

If your business operates in volatile markets with unpredictable costs (like international payments with foreign currency exposure), extended horizon forecasts help you spot risks earlier. Pairing a longer forecast window with a solid FX risk management strategy as well can give you time to act on what you see coming.

If your operations are more stable and you prioritise forecast accuracy over strategic range, near-term models may serve you better.

In practice, many businesses will use both — an extended horizon forecast for strategic decisions alongside near-term forecasts for operational ones.

The rolling forecast process (in 5 steps)

Building a rolling forecast doesn't require enterprise software or a dedicated financial planning and analysis (FP&A) team. It starts with defining the right structure and committing to regular updates.

1. Define your time horizon and update frequency

Start by choosing your total forecast window and update cadence. Most businesses maintain 12 months of visibility, though some extend to 18–24 months for longer-range planning.

Monthly updates give you tighter control but require more effort, while quarterly forecasts are more manageable but less responsive to fast-moving changes.

Whatever cadence you choose, consistency matters most. A rolling forecast only works if you actually roll it forward on schedule.

2. Identify your key business drivers

Focus on the metrics that actually move your financial projections, like revenue by channel, cost of goods sold, major expense categories and cash flow timing.

For international businesses, you’ll likely want to add currency exposure as a core driver — which currencies you transact in, what volumes and when payments are due.

What’s most important here? Resist the urge to forecast every line item.

Rolling forecasts work because they're fast and focused, not because they're exhaustive. A key-driver-based approach lets you update a handful of inputs and see the financial impact flow through automatically.

3. Separate known costs from variable costs

Categorise your costs into what's locked (contracts, salaries and fixed commitments) versus what's variable (materials, shipping and currency-dependent costs). Known costs go into your forecast as fixed numbers, while variable costs get updated each cycle based on current data.

This separation is especially critical for international businesses. A supplier invoice in USD is a known cost in dollars but a variable cost in your home currency.

4. Lock in predictable costs where possible

For international payments, you can convert variable costs into known costs by locking exchange rates with forward payment contracts.

When you know you have a €100,000 supplier payment due in 4 months, locking the exchange rate today means you know exactly what it will cost in your home currency.

If you know the total amount but dates are uncertain, consider flexible forward payment contracts you can draw down over time. The more costs you can convert from "unknown" to "known", the more accurate your rolling forecast becomes.

5. Build in regular variance reviews

Every time you update your forecast, compare actual performance to what you projected. Where were you off and why?

This variance analysis turns your rolling forecast from a planning exercise into a learning system, with each cycle teaching you something about your assumptions.

Pay special attention to foreign currency-related variances. If you're consistently surprised by FX movements, that's a signal to lock in more of your exposure upfront.

Common rolling forecast challenges (and how to solve them)

Rolling forecasts sound simple in theory but run into practical obstacles. Here's how to address the most common ones.

Data quality and integration issues

Rolling forecasts require timely, accurate data from across your business. If your systems don't talk to each other, you'll spend more time gathering numbers than analysing them.

For international businesses, this includes visibility into cash positions across currencies, pending payments, and locked versus unlocked FX exposure.

The solution is consolidation.

You need a single view where you can see your complete financial position — across every currency you transact in — in real time, rather than piecing together spreadsheets from different systems. Multi-currency accounts that show all your balances in one place can eliminate much of the manual data entry that slows forecasting cycles down.

Getting buy-in across departments

Rolling forecasts require input from sales, operations and finance. If any group drags their feet on updates, the whole process stalls.

The key is showing each stakeholder what's in it for them:

• Sales gets more accurate quota targets
• Operations gets better resource planning
• Finance teams get fewer budget surprises

If there’s hesitancy, consider starting small with a pilot group to prove the value, then expand. Trying to roll out company-wide on day one can create resistance.

Accounting for seasonal volatility

If your business has significant seasonal swings like holiday rushes, summer slowdowns, and end-of-quarter spikes, a standard rolling forecast can miss patterns that only show up year-over-year.

A 3+9 model prepared in April might not capture what happened during last year's Q4 peak, leaving you to forecast the busy season without that historical context.

The solution here may be to keep trailing 12-month actual data accessible alongside your rolling forecast so you can compare current projections against the same period last year.

How iBanFirst can help you build more accurate forecasts

Rolling forecasts only work when you have real-time visibility into your cash position and control over your variable costs. For international businesses, that means getting a handle on currency exposure before it shows up as a variance you didn't see coming.

That’s where iBanFirst comes in.

iBanFirst gives finance teams the tools to turn unpredictable FX costs into known numbers.

With iBanFirst, you can:

• See your complete cash position across 25+ currencies in one dashboard
• Lock in exchange rates for future payments using forward payment contracts
• Use flexible forward payment contracts when you know the amount but not the exact timing
• Work directly with FX specialists when you need support on managing FX risk

The result is fewer surprises in your rolling forecast and more confidence in the numbers you're planning against. If you're ready to bring more predictability to your international payments, take the interactive product tour or request an account to get started.