6+6 forecast: Create a midyear budget that adapts to change

Do you ever feel like your financial forecasts are always a step behind the market realities? You’re not alone. Many finance teams struggle to keep their budgets relevant when market conditions shift.

That’s where the 6+6 forecast comes in. This approach combines 6 months of actual results with 6 months of projections to give your finance team real-time insights and agility. It bridges the gap between a static annual budget and the flexibility businesses need to respond to change.

What is a 6+6 forecast?

A 6+6 forecast is a financial planning tool that blends 6 months of historical data with 6 months of projected data. The combination gives you a reliable foundation and a forward-looking perspective, making it easier to adjust strategies midyear.

Historical data grounds your forecast in reality, while projections prepare you for shifts in revenue, expenses, and cash flow. This mix helps finance leaders stay agile and make better decisions.

Alternative forecasting methods

The 6+6 forecast is generally conducted midyear, when you have 6 months of actuals and 6 months of projections ahead. Other common models include:

• 3+9 forecast: Three months of actuals and nine months of forecasts, often used earlier in the year
• 6+3 forecast: Six months of actuals plus three months of projections
• Rolling forecast: Updated monthly or quarterly for a set number of future months

When and why to use the 6+6 forecast

Typically, the 6+6 forecast comes midyear, in July, to measure your first half of financial results and plan for the second half. It’s especially useful when your team needs to course-correct for supply chain disruptions, changing customer demand, or market volatility.

5 signs you need a 6+6 forecast

A 6+6 forecast bridges the gap between your annual budget and your ability to look ahead. If these situations sound familiar, it may be time to adopt this model:

1. You’re stuck with outdated annual budgets: Static budgets can’t keep up with fast-moving industries. If your retail business suddenly lands a hot new product, you need the flexibility to adjust spending to capture sales.
2. You struggle to adapt to market shifts: Delays in the supply chain or sudden price changes demand updated forecasts, not static plans.
3. You miss opportunities due to slow financial response: Long gaps between forecasts delay decisions. If demand spikes, you shouldn’t have to wait months to scale production.
4. You face cash flow challenges: Without short-term cash flow visibility, you risk overcommitting resources. A marketing agency, for example, could take on new clients while existing invoices remain unpaid.
5. You lack agility in reallocating resources: Static budgets prevent you from shifting funds to high-performing teams. If sales has a breakout quarter, updated forecasts let you scale support in real time.

When these issues pile up, moving from an annual budget to a 6+6 forecast helps your team stay agile and make faster, smarter decisions.

Continuous close and rolling forecast connection

A continuous close means you don’t wait until month- or quarter-end to reconcile your books. Instead, you record and review transactions continuously, giving your team real-time financial visibility.

That real-time view supports more agile forecasting. It:

• Keeps your forecasts aligned with actual results
• Reduces the lag between reporting and decision-making
• Provides the accuracy you need for strategic planning

Rolling forecasts and the 6+6 approach

A rolling forecast updates your outlook monthly or quarterly, extending the view forward for a set number of months. A 6+6 forecast, by contrast, gives you a structured midyear check-in.

The two approaches complement each other. If you’re already using rolling forecasts, you can add a 6+6 forecast 6 months into the year as a deeper reset. And as your forecasting practices mature, you may eventually shift from 6+6 or 3+9 to a rolling forecast.

In fact, the 2024 FP&A Trends Survey found that 49% of companies now use rolling forecasts—up 2% from the previous year—showing the momentum behind this approach.

Benefits of integrating continuous close with 6+6

Pairing continuous close with a 6+6 forecast leads to:

• More accurate data
• Fewer errors
• Real-time insights for scenario planning
• Greater agility in responding to change

Benefits of using a 6+6 forecast

Finance leaders often worry about missing market shifts or being too slow to act. A 6+6 forecast helps by combining past results with forward-looking data so you can respond faster and plan smarter.

Here are the key benefits:

• Faster response to change: With 6 months of actuals and 6 months of projections, you can pivot quickly when conditions shift
• Better accuracy: Grounding forecasts in actual data makes projections more reliable than an annual plan alone
• Stronger cash flow management: Spot trends that could cause shortfalls and take action before problems escalate
• More confident stakeholders: Timely, realistic forecasts give leadership and investors greater visibility into likely year-end results

Budgeting vs. forecasting: key differences

Budgeting and forecasting serve different purposes in financial planning, and understanding the distinction helps you use both effectively.

A budget sets financial goals for the year, based on expected income and expenses. A forecast projects financial outcomes based on current data, trends, and assumptions.

Here’s how they compare:

6+6 forecasting bridges the gap. It grounds your midyear outlook in actual results while projecting the path ahead, so you can stay agile without losing sight of your goals.

How to create a 6+6 forecast

Building a 6+6 forecast may feel daunting, but breaking it into steps makes the process manageable.

1. Gather historical financial data

Collect 6 months of revenue, expenses, and cash flow. Comprehensive records of past transactions give you the baseline trends to build from.

2. Analyze recent trends and variances

Look at both external and internal factors. Consider industry shifts, economic conditions, and regulatory changes alongside your company’s sales patterns, operating costs, and performance gaps.

3. Project the next 6 months

Use your historical baseline to estimate revenue, expenses, and cash flow. Create best-case, worst-case, and most-likely scenarios so you’re ready for different outcomes.

4. Review and update regularly

Compare your actual performance with your forecast. Spot variances, understand why they happened, and adjust your outlook to keep it accurate and useful.

Rebudgeting rules to master the 6+6 forecast

A 6+6 forecast is only as strong as the adjustments you make along the way. Regular rebudgeting keeps your plan aligned with reality and helps your team act before problems escalate.

Here are four rules to follow:

Rule 1: Strengthen ongoing variance analysis

Strong rebudgeting begins with variance analysis, which measures the difference between your budgeted outcomes and your final results. Regularly compare your actuals to your projections, focus on significant variances—positive or negative—and adjust your forecast based on what you learn.

Rule 2: Optimize resource allocation frequently

Rebudgeting gives you the chance to rethink your resources and reallocate your budget, personnel, and marketing efforts to where they’ll have the highest impact. Consider scaling back resources from underperforming areas to maximize efficiency. Scenario planning can help you test different outcomes before committing.

Rule 3: Evaluate rolling financial metrics

Static KPIs may not reflect current realities. Track rolling metrics like cash flow and burn rate on an ongoing basis. Leverage dashboards and real-time forecasting tools to stay ahead and guide your rebudgeting decisions.

Rule 4: Be proactive with cost controls

Rebudgeting provides an opportunity to implement cost controls before problems emerge. Review subscriptions and vendor contracts for waste, act on cost-saving opportunities early, and reinforce internal workflows to keep spending in check.

Common mistakes to avoid in 6+6 forecasting

Even with a solid process, it’s easy to fall into traps that reduce the value of your 6+6 forecast. Watch out for these pitfalls:

• Relying too much on old data: Past results provide a baseline, but they don’t capture sudden changes in markets, customer behavior, or the economy. Balance historical trends with current indicators.
• Failing to update regularly: A 6+6 forecast only works if you refresh it often. Compare actual results to projections and adjust as you go.
• Leaving out cross-functional input: Finance alone can’t see the full picture. Pull in insights from marketing, operations, and HR to capture upcoming initiatives or risks.
• Overcomplicating the model: Adding too many variables makes the forecast hard to maintain and communicate. Focus on the drivers that have the biggest business impact.

How can Ramp's platform enhance 6+6 forecasting?

Finance managers often dread the manual work involved in forecasting. Ramp's platform can make this process much easier. Expense management tools provide real-time data, giving you up-to-the-minute insights into your financial status. This immediacy allows for more accurate and timely adjustments to your 6+6 forecast. When you know exactly where your money is going, you can make better decisions about where to allocate resources.

The platform automates data collection and analysis, eliminating the need for manual entry. This automation reduces errors and saves time, allowing you to focus on strategic planning rather than administrative tasks. With automated data collection, you can ensure that your 6+6 forecast is always based on the most current information. Learn more about finance automation that delivers 10x intelligence.

Insights help identify cost-saving opportunities by analyzing spending patterns and highlighting areas where you can cut costs. These insights are invaluable for making informed decisions about reallocating resources and adjusting your budget. When you can see where your money is being wasted, you can take steps to eliminate those inefficiencies.

The platform streamlines the rebudgeting process, making it easier to update your 6+6 forecast as new information becomes available. This streamlined process ensures that your forecast remains accurate and relevant, allowing you to make quick adjustments as needed. With a more efficient rebudgeting process, you can respond more effectively to changes in your business environment. For more on this, read our guide to finance automation.

Ready to master your 6+6 forecast and streamline your financial planning? Visit Ramp's pricing page to learn how we can help you save time and money while enhancing your budgeting accuracy.