Before a forecast miss review goes to the board, stress-test it. Split the miss into parts that add up to the total, check whether the explanation matches what leaders said in earlier months, and give every recovery commitment an owner and a date, then decide what the board hears and what operations fixes. Paste the forecast, the actuals, the bridge between them, and each month's explanations into one request. Instruct Pingpong to flag pieces of the miss that are unexplained, causes that changed from month to month without acknowledgment, and recovery claims with no date. Review your written answers in a second round.
This page is for chief executives and finance leaders preparing a board discussion after a quarter or half came in below forecast. The recurring pack that should have surfaced the miss is covered in war-game a metrics review before the board reads the numbers. Executive starting points live under Pingpong for executives.
Break the miss into pieces
- Definitions and accounting: anything that moved the number without changing what happened in the business. List these first.
- Timing: revenue that slipped into the next period with a signed or near-signed customer behind it. Name the deals.
- Volume: fewer customers, smaller deals, or more churn than planned. This is usually the real story.
- Price: discounts, mix shifts, or concessions that lowered revenue per customer.
- One-offs: events that will not recur, with a reason to believe they will not.
If the pieces do not add up to the total, the review is not ready. A gap labeled "other" is where directors start asking questions.
Watch for story rot
Explanations for a miss tend to change as the quarter goes on. In the first month it is the economy. In the second, a few large deals slipped. By the third, pipeline quality was never what it looked like. Each may be partly true, and a board that has heard all three will ask which one holds. The review should line up every explanation given during the period and say plainly which ones survived contact with the actuals. Leaders who do this themselves keep the board's confidence.
A worked example
This example is illustrative and does not describe a customer. A subscription software company forecast $14.0 million in quarterly revenue and reported $12.6 million, a miss of $1.4 million, or 10 percent. The draft board review blames "longer sales cycles and macro headwinds" and says the company expects to recover in the next quarter.
The chief executive and finance leader paste the forecast, actuals by segment, and each month's review notes.
A useful pass finds that $0.4 million of the miss came from finance moving multi-year prepaid deals to ratable recognition partway through the quarter, unmentioned in the draft. Three enterprise deals worth $0.5 million slipped and are still open, two of them with procurement. Small-business churn ran 2 points above plan, costing $0.3 million, also unmentioned. Discounting on renewals cost another $0.2 million. The monthly notes show three different causes over the quarter, and the recovery claim has no owner and assumes all three enterprise deals close in the first month.
The revised review opens with a one-line bridge: $0.4 million accounting, $0.5 million timing, $0.3 million churn, $0.2 million price. It says the accounting change was correct and should have been flagged when it was made. It names the three enterprise deals with a realistic close month for each. It treats small-business churn as the real problem, with the customer success leader owning a retention plan and a target for next quarter. The discounting gets a new approval threshold. The recovery claim becomes two scenarios with the assumptions written out. One sentence acknowledges that earlier monthly explanations pointed the wrong way.
What goes where
For the board: the bridge, the one or two causes that matter, the recovery dates, and whether the full-year plan still holds. If it does not, that is a separate conversation, covered in war-game a budget reforecast before you present the new numbers.
For operations: the deal-level detail, the churn cohorts, the discount approvals, and the process change that would have flagged the accounting shift sooner.
A request you can copy
Below are our forecast, actuals by segment, the bridge between them, monthly review notes, and the draft board review. Check whether the bridge adds up and flag anything unexplained. Separate accounting and definition changes from performance. Line up the explanations given each month and say which still hold. Flag recovery claims with no owner, date, or stated assumptions. Suggest what belongs in the board review and what belongs with operations. Stop there so we can answer in writing, then review our answers.
How Pingpong runs the review
The web review app sends your request through several models in order. Each later model receives the original request and every earlier answer, with instructions to assess the work so far. For the steps inside the app, see running your first review.
What a model can't review
A model works from the figures you give it and cannot audit them. Finance and your auditors own the numbers and the accounting. Pingpong checks whether the review explains them accurately and consistently.
When the decision goes to the board, see war-game a decision before the board meeting. More guides live under work decisions before you commit.