Forecast Accuracy
A measure of how closely financial projections match actual results — indicating how well a company understands its own financial dynamics.
RunwayCal tracks how your forecasts compare to reality, helping you improve over time.
What is Forecast Accuracy?
Forecast accuracy compares what you predicted would happen financially against what actually happened. If you forecasted $80,000 in expenses last month and actually spent $85,000, your expense forecast was off by 6.25%.
High forecast accuracy signals that a founder understands their business — they know where the money goes and can predict future spending and revenue with reasonable precision. Low accuracy suggests the business has unpredictable dynamics or the forecasting process is broken.
Forecast accuracy improves over time. Early-stage startups naturally have lower accuracy because the business is changing rapidly. But the process of forecasting and measuring accuracy builds financial muscle.
Why it matters
Forecast accuracy is a credibility metric. When you tell your board "we'll hit $100K MRR in 6 months" and your past forecasts have been within 10% of actual, they believe you. If your past forecasts have been wildly off, they discount everything you say.
More practically, better forecasting means better planning. If you can predict your expenses and revenue within a tight range, you can manage runway with confidence instead of guessing.
Formula
Forecast Accuracy = 1 - |Actual - Forecast| / Forecast Or: Forecast Error % = |Actual - Forecast| / Forecast × 100
Example
You forecasted $90,000 in total expenses for March. Actual expenses were $95,500. Forecast error = |$95,500 - $90,000| / $90,000 = 6.1%. Forecast accuracy = 93.9%. This is good — within the typical 5-10% range for startups with decent financial processes.
How RunwayCal helps
RunwayCal tracks forecast-vs-actual accuracy over time, giving you a score that improves as you refine your inputs. The variance analysis system highlights where forecasts diverged from reality and why.
Common mistakes
- 1Not tracking forecast accuracy at all — missing the feedback loop that improves planning
- 2Measuring accuracy only at the total level instead of by category (you might be right overall but wrong in specific areas)
- 3Adjusting forecasts retroactively to appear more accurate instead of learning from variances
Improve your financial forecasting over time
RunwayCal scores your forecast accuracy and shows where projections diverged from reality — so every month you plan better than the last.
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