How-to guides
Ask or search…
Comment on page

The budgeting cycle

The best-practice budgeting cycle framework that Francis is designed for
Smaller companies can choose only to implement a part of the steps. For example, some may choose only to do a start-of-year budget and no rolling forecasts, while others may choose to only work with a rolling forecast but not a start-of-year budget. Similarly, some may choose to forego monthly reports or scenarios.
Annual budget
Rolling forecasts
Budget variance analysis

Annual budget

The annual budget is a 12-month budget at the outset of the year. It typically follows the calendar year, but it can vary.
The annual budget is great for setting objectives and holding yourself accountable. Use this budget to set expectations for the year and approve it with stakeholders if relevant.
We recommend saving a version of the budget once approved. If you want to update it throughout the year, we have rolling forecasts for that. Even if your performance greatly varies from the annual budget, keep it for comparison purposes throughout the year.

Rolling forecasts

Rolling forecasts support running your business since they reflect the latest picture.
Update your model with current actuals and other model edits to create an updated forecast.
Every quarter (or your desired cadence), save a version that you can compare to your actuals and annual budget.
We recommend naming your rolling forecasts something that’s easy to identify (e.g., “Q2 forecast”, "3+9 forecast" or “April forecast”).

Budget variance analysis

We recommend that you follow up and report on your performance once a month.
Following up and reporting typically involve five steps:
  1. 1.
    Close your books and import new actuals into Francis.
  2. 2.
    Verify that your transactions are categorized correctly.
  3. 3.
    Compare your annual budget, rolling forecast, and actuals on a "last month," "year-to-date," and "full year" basis.
  4. 4.
    Report updates and key metrics to your stakeholders.
  5. 5.
    Decide if you want to make any other model edits for your next forecast and implement those updates.‍


Scenarios also greatly support running your business since you can investigate how strategic plays and events impact your business.
There are two kinds of scenarios:
#1 An index of your base case (e.g., good and bad case). These are typically applied to your start-of-year budget to allow for some deviations.
#2 To experiment with specific events (e.g., What if fundraising doesn't go through? What if revenue stalled? What if we got a new large client?). These are typically more operational, used for decision-making throughout the year, and therefore applied to your latest forecast.