5 steps to build a rolling forecast
Budgets are a lie. Great CFOs use 5 steps to build a rolling forecast.
I spoke to a CFO who said:
“I hate budgets. They don’t make any sense. It’s the biggest waste of time on earth.”
Planning isn’t useless but pretending certainty exists that far out is dishonest.
By December, the board approves something that already feels fragile.
By January, assumptions are wrong.
By February, everyone asks for a forecast.
Which raises the uncomfortable question CFOs don’t ask out loud:
If we know this always happens, why do we keep doing it?
CFOs feel uneasy about forecasts.
CFOs don’t distrust forecasts because the math is wrong.
They feel uneasy because forecasts sit at the intersection of optimism, incentives, and operational reality.
The CEO is optimistic by nature. Sales leaders see opportunity everywhere. Operations sees constraints. HR sees hiring speed, fatigue, and performance dispersion.
Finance sits in the middle, expected to turn belief into numbers.
This is where tension begins.
A sales leader says, “We’ll make 200 placements this month.”
Finance looks at the run rate: 20 placements per week.
When unchecked optimism flows directly into hiring decisions, cost-base expansion, and cash commitments, the damage doesn’t show up immediately.
It shows up later. In cash. When it’s much harder to fix.
That’s the real CFO anxiety.
In today’s letter, I’ll share 5 steps great CFOs use to Build a Rolling Forecast and impress your CEO and the Board.
Let’s dive in.
But First, Why Forecasts Exist at All?
Strip everything back and forecasting has only one real purpose.
A CFO needs to know:
Do we have enough cash to run the company Or do we have so much cash that we need to decide what to do with it?
Those are the 2 states.
If cash tightens, the questions are immediate:
Do we slow hiring?
Do we accelerate receivables?
Do we reallocate investment?
Do we shorten the close to unlock visibility faster?
If cash builds, the questions change:
Do we acquire?
Do we invest more?
Do we accelerate hiring?
Do we push growth harder?
A forecast that does not lead to clear actions is not a forecast.
It’s documentation.
Here are 5 steps every CFO must take to build a rolling forecast.
Read on.
Step 1: Reduce the business to its truth
Every effective rolling forecast starts with an uncomfortable exercise.
Reducing the business to what actually drives it.
Not line items, hundreds of rows or false precision.
A CFO must be able to say, without hesitation:
“These are the 3 to 5 drivers that truly move this business.”
In a staffing company, it might be:
How many recruiters are productive?
How many client visits are happening?
How many placements are made per week?
In a project business:
Delivery capacity.
New bookings.
Utilization.
In SaaS:
Churn.
Conversion.
Hiring velocity.
Pipeline creation.
If you can’t articulate the drivers, you are not forecasting. You are narrating. And if those drivers can’t be challenged, they become dangerous.
This is where many finance teams struggle.
Not technically, but emotionally.
Letting go of detail feels like losing control.
In reality, it’s how CFOs regain it.
Step 2: One forecast with one agreed set of drivers
When drivers are clear and owned, margin improvement stops being debated and starts being explained.
Boards don’t want 10 versions of the truth.
They want one shared reality.
One forecast.
One agreed set of drivers.
A small number of scenarios.
If this scenario plays out, what do we do differently? If we run tight on cash, what actions do we take as a board? If the assumptions hold and we outperform, how do we accelerate responsibly?
You must turn forecasting into leadership.
Shift the debate from numbers to decisions.
Step 3: Where AI actually helps (And Where It doesn’t)
Structural shifts matter most when they are visible before they force reactive decisions.
AI does not fix bad assumptions. AI does not replace judgment.
AI does not magically make optimism realistic.
AI earns its place when it surfaces contradictions early.
For example:
Bookings per rep decline for two consecutive months.
Sales claims next month growth will jump 20%.
AI doesn’t decide who is right.
It puts the tension on the table and asks:
What changed in the business that makes this realistic?
That conversation must happen before the board meeting.
Not during it.
One CFO described this perfectly:
“This is the meeting before the meeting.
If that discussion happens during the board meeting, we’re already late.”
AI is valuable when it accelerates those conversations, not when it produces prettier spreadsheets.
Step 4: Early warning is about upside too
Most people think early warning systems exist to catch problems.
They also catch missed opportunities.
One CFO shared a painful lesson. The business was doing well. Margins were fine. Cash was healthy. Hiring felt cautious. Responsible.
But salespeople weren’t added fast enough. Recruiters weren’t ramped. Productivity never compounded. Short term, costs looked controlled. Long term, growth was capped.
Not hiring felt safe. It turned out to be the most expensive decision.
A real rolling forecast doesn’t just say:
“We’re in trouble.”
It also says:
“We’re leaving growth on the table.”
That’s the difference between reporting and steering.
Step 5: Scenarios exist for preparedness, Not drama
By the time numbers reach the board, the drivers should already be understood.
Scenarios are not about modeling disasters.
They are about avoiding paralysis.
What happens if:
A market freezes overnight?
Another systemic shock hits?
A top client representing 30% of revenue leaves?
Boards don’t expect certainty.
They expect readiness.
If this happens, do we know what to do?
That’s what earns CFO credibility.
What Boards Actually Want
Boards don’t walk into meetings looking for more information.
By the time something reaches the board, detail has already failed. Detail is what teams use before decisions are made, not after.
This is why boards don’t ask for more detail, more tabs and more confidence intervals. They’ve seen those before. They know what happens next:
Discussion slows
Accountability blurs
Responsibility gets pushed to the next meeting.
What boards actually want is alignment.
One forecast.
One set of drivers.
One clear decision frame.
One forecast forces everyone to confront the same reality. There’s no “my version” versus “your version.” Just one shared view of where the business is heading if nothing changes.
And once that reality is clear, the board immediately moves to the only question that matters: What are we doing about it? Not theoretically. Not after another analysis.
Now.
If the forecast shows cash tightening, the board wants to know which levers are being pulled in the next 30–90 days. If the forecast shows strength, they want to know why the business isn’t moving faster and what upside is being left on the table.
Boards don’t judge CFOs on whether the forecast is perfectly accurate.
They judge CFOs on whether they were prepared.
Prepared with clear drivers.
Prepared with realistic assumptions.
Prepared with actions already thought through.
That’s why the real work of forecasting happens before the board meeting, in the conversations that align belief with reality.
By the time the board asks, the CFO should already know the answer.
Now.
Not next quarter.
The Bottom Line
Rolling forecasts collapse when finance operates in isolation.
The strongest CFOs operate like a super team.
With CHROs, to align hiring pace with reality.
With CIOs, to align technology investment with capability.
Great CFOs run weekly HR steering meetings:
Hiring velocity versus growth plans.
Producer performance.
Where to accelerate?
Where to intervene?
Forecasting without HR is blind. Forecasting without operations is naive.
Rolling forecasts are not about 101% accuracy.
They are about preparedness.
Preparedness to challenge optimism. Preparedness to act early.
Preparedness to explain reality calmly when others cannot.
AI does not replace CFO judgment.
It sharpens it.
And CFOs who master this don’t just report numbers.
They shape decisions.
That is the real job.
And that’s all for today.
See you on Thursday!
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I’m Wouter Born. A CFOTech investor, advisor, and founder of finstory.ai