FP&A
What Is a Reforecast?
A reforecast is a mid-year update to the annual plan, triggered when actuals diverge enough from budget that the original assumptions are no longer reliable. It is the CFO's signal to leadership and the board that the operating environment has materially changed and the original plan is no longer the right anchor. Unlike a rolling forecast, which is calendar-driven every month, a reforecast is event-driven by divergence.
A reforecast is a mid-year update to your annual plan, triggered when actuals diverge enough from budget that the original assumptions are no longer reliable. It's the CFO's signal to leadership and the board that the operating environment has materially changed and the original plan is no longer the right anchor.
When to reforecast
- Revenue or EBITDA variance over 10 percent for 2 or more consecutive months
- Material change in operating assumption (foreign exchange shock, supplier disruption, new product underperforming)
- Quarterly minimum, even without a specific trigger
- Pre-fundraising or pre-M&A: always reforecast to current expectations before the diligence process starts
Reforecast vs rolling forecast
A rolling forecast is calendar-driven (every month). A reforecast is event-driven (triggered by divergence). A team running rolling forecasts technically reforecasts monthly, but the term "reforecast" usually means a materially-changed assumption set, not just a monthly refresh.
Communicating a reforecast
Always with a cover memo. Three sections:
- What assumption changed (and the data backing the change)
- The variance pattern that triggered the reforecast
- Revised year-end numbers plus operational response
Boards trust CFOs who flag changes early. Trust collapses when the board discovers the change in the next Budget vs Actual (BVA) report two months later.
The most common mistake
Reforecasting too often. Monthly noise can't trigger a reforecast. That's just the monthly close. A reforecast is a signal that operating assumptions have meaningfully changed. Reforecasting weekly devalues the term and the signal.
Frequently Asked Questions
when should i actually call a reforecast?
Variance over 10 percent for 2+ months, or a material assumption change, or as a quarterly minimum.
reforecast vs rolling forecast, what's the difference?
Reforecast is event-driven (triggered by divergence). Rolling is calendar-driven (every month).
how should i communicate a reforecast to the board?
Cover memo with assumption change, trigger pattern, revised numbers, and operational response. Don't bury it.
Related Terms
- What is a rolling forecast?
- What is variance analysis?
- Budget vs forecast vs actuals
- What is 13-week cash flow?
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