Four Reasons Why Your Firm Needs Rolling Forecasts

The business climate for law firms and professional services organizations is increasingly more competitive and volatile than ever before, requiring firms to be more accurate and agile with their strategy and planning processes. Firms have been relying solely on annual budgets or periodic forecasts to make important business decisions. However, this practice can cause firms to compromise the quality of their decisions immensely. The role of the CFO and finance departments is evolving to a strategic business partner at the firm, requiring greater involvement and leadership on setting the firm’s targets and strategy. Below are a few great reasons why your firm should consider implementing sound forecasting practices to support the modern role of financial leaders and remain competitive and profitable in this rapidly changing business environment.


The practice of rolling forecasts provides firms flexibility and financial agility to adapt to fluctuations that occur throughout the course of the year. Budgets are relatively stagnant and do not factor in variations or uncertainties, ultimately rendering them less helpful should anything change within the firm or within the industry. Budgets can take a lot of effort to prepare and often require many teams to collaborate over the course of several months. Should any significant change take place within the firm, the revenue and expense budgets can become obsolete and can cost the firm lost productivity and billings and require unanticipated write-offs and discounts. Monthly or quarterly rolling forecasts can help your firm quickly adjust and correct course proactively to ensure your revenue and profit targets are protected.


The practice of forecasting is vital to the success of a firm since it encourages the collaboration of various teams on a regular basis. One of the shortcomings of creating annual budgets is that teams meet only once a year to put them together. For the remainder of the year, there is a lack of communication between teams. With rolling forecasts, teams are required to meet on a regular basis and have visibility to changes in the business, and they can make informed decisions to ensure accuracy and control unnecessary spending. Furthermore, this simplifies preparation of next year’s annual budget and increases efficiency.

Mitigate Risk

Rolling forecasts help mitigate risk by providing opportunities for firms to re-assess their key metrics and identify any errors or inconsistencies that exist in initial forecasts or budgets. This level of transparency into the firm aligns stakeholders so they can make quick and accurate business decisions with greater confidence. Furthermore, it encourages the financial planning and analysis team to review updated financials on a regular basis rather than toward the end of the year when identifying an error may become more cumbersome and detrimental to the firm.


Just as the way of doing business has changed dramatically, the way firms strategize has also evolved. By implementing rolling forecasts, firms are able to plan weekly, monthly, or quarterly, depending on the speed at which their business changes and adjustments are required. Budgeting can be limiting because much of the information becomes obsolete relatively quickly or even before it has been rolled out throughout the firm. With rolling forecasts, firms are able to incorporate year to date data and analytics into their forecasts and project future performance based on how the year has progressed. Rolling forecasts makes it possible for firms to take immediate action, protect profits, stay ahead of the rapidly changing business climate, and increase their competitive advantage.

Closing Remarks

Budgeting and rolling forecasts together provide firms with management tools that are imperative to the success of the firm – increasing profits and providing better service to their clients. Budgeting allows firms to test their business acumen by comparing the accuracy of actuals to budgets, and forecasting allows firms to strategize based on implications of what is to come in the future.

The right technology can be a key enabler, introducing vital control, efficiency, and flexibility to the forecasting process. Technology can also help standardize processes, facilitate team collaboration, and provide flexible models for driver-based planning and quick creation of different what-if and forecast scenarios. When evaluating the right solution for your firm, look for solutions that are tailored for law firms and professional services organizations, are able to connect to any data source, have standard certified integration into your firm’s GL and time billing systems, and reduce your total cost of ownership.

Technology is just one vital part of several success factors. Educating the firm’s key participants, having the right talent in the financial planning and analysis staff, and building a business culture that has support from top level management for promoting rolling forecasts as an important management tool are also key factors to ensure rolling forecasts will be adopted and provide strong value.


OLAP Vision

OLAP Vision is an innovative technology company delivering solutions for mid to large law and professional services firms. OLAP Vision's flagship product, xcelerate, is the only Excel and Web-based Budgeting and Forecasting application built specifically for legal and PSO industries with integration for 3E and Enterprise. As exclusive partners to Thomson Reuters Elite, OLAP Vision provides Budgeting and Financial Reporting expertise. Its team members created the Elite Clarity Budgeting and Financial Reporting product and literally wrote the book on implementation best practices and upgrade methodologies. Leveraging insight and industry-specific best practices, OLAP Vision helps firms increase efficiency, saving time and money. Click here for more information.

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