The forecast was 2% out. Every line in it was wrong.

Aggregate forecast accuracy is the most comforting number in the board pack, and often the least informative. Here is what it conceals.

By Steve 5 min read
Abstract bridge artwork for The forecast was 2% out. Every line in it was wrong.

A revenue forecast lands within a couple of per cent of actual. The finance director notes it, the board nods, and the number goes unexamined for another quarter. Then someone opens the underlying lines. One region came in 30% under. Another came in 25% over. A large deal that was forecast for March closed in June, and a deal nobody had in the model closed in April. The total was almost exactly right. Not one line was. This is not an unusual pattern. It is close to the default outcome…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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