Why sales forecasting is essential

Creating a sales forecast, also known as a sales forecast, helps you make more focused decisions. For example, it creates insight into ongoing sales processes, allowing you to better anticipate future orders and schedule resources. But making an accurate forecast is not that easy. In this article, we tell you why you should use a sales forecast and how it works in Salesforce. 

What is a sales forecast? 

A sales forecast is an expression of expected sales over a given time period. It estimates how much a company plans to sell in a given period. Good forecasts are accurate and answer two important questions:  

• How much does an opportunity yield? 
  Every opportunity has an expected return. Using data from previous opportunities, you can use a forecast to estimate how much an opportunity will yield. 
   
• When was the expected revenue realized? 
  The forecast indicates the month, quarter or year in which the sales team expects to realize sales. 

Why is a sales forecast so important?

An accurate forecast ensures that you won't face any surprises. For any business, there are benefits to having a good forecast, such as gaining insights useful for planning resources. For example, certain investments may depend on projected sales, such as how much money you put into a marketing campaign and how many new hires you make.  

In some industries, resource planning is even more important. Particularly in manufacturing companies, it is important to be able to optimally plan production capacity so that inventories are never empty or overstocked. Consider the inventory of items and packaging for shipment, but again, the amount of staff needed to process shipments during busy periods.  

Revenue forecasting with Salesforce 

Creating a sales forecast with data from different documents and spreadsheets is not easy and, above all, very confusing. Salesforce brings all the data together in one platform. In addition, the data from Salesforce is always up-to-date, giving you a current overview of the entire pipeline and sales team. Salesforce Sales Cloud offers a number of tools to make making a good forecast easier: 

• Forecasting for complex sales teams  
  Do you have a company with a complex sales force? Then Salesforce can be a godsend. If multiple team members have worked on a deal, you can divide their share (credits) with Revenue Split. This makes it clear to each team member what value they have added to a won opportunity. If you also want to recognize the share of people outside the commercial team, you can also assign credits to those individuals with Overlay Split. This allows the total number of credits you award to be above 100%. Consider, for example, the proportion you want to allocate to designers. 
  


• Salesforce AI: Einstein 
  Salesforce uses Einstein AI. Einstein can make predictions based on historical data. This helps predict, for example, sales opportunities, customer behavior and trends. In addition, Einstein provides an objective view by making complex analyses without being influenced by human factors such as emotions. This can make it easier to support difficult personal decisions.  

Forecast dashboard 

A forecast dashboard helps provide quick insight into the information from a sales forecast. After all, is the entire sales department performing well? Or is most sales coming from the same team? And is there a category of products that is sold much less? The forecast dashboard gives you immediate answers to these kinds of important questions, because visual information from graphs and charts, is much easier to interpret. This makes it easier to see where your challenges lie. 

Think carefully about what insights you could get from a sales forecast, create reports from them and bundle them into the dashboard. We recommend including at least the following reports in the forecast dashboard: 

• Deals closed and forecasts by fellow worker 
• Turnover forecast by team 
• Revenue forecast by stage 
• Sales forecast by region 
• Forecasting predictions through AI. 

Why a sales forecast is indispensable 

An accurate sales forecast is essential for making targeted decisions. It helps plan resources, ensures that you know when to expect what revenue, and allows you to invest responsibly. So are you using Salesforce but not yet using a sales forecast? Then get started with it. With a well-maintained CRM, you've come a long way. The necessary data is in one system, is up-to-date and gives an overview of your sales activities. To start with, bring the most important insights together in a dashboard. This way, the first steps for a good sales forecast have already been taken. The reality is that selling is more complex than ever, making it impossible to work with separate files and spreadsheets. The more you want to sell, the more you will have to build on the data from your CRM.