Revenue Planning & Sales Forecasting

Revenue planning plays a key role in most companies’ budgeting, forecasting, and reporting. The ways that different companies plan revenue can vary widely. But what’s common to many revenue planning models is the need for detail by dimensions such as product and customer, and for driver-based planning, using some variation of units x price = revenue.

Within that framework, though, revenue planning characteristics can be particular to a company’s industry. For example, manufacturing companies often plan production and sales unit volumes, matching supply and demand, automatically driving integrated costs and revenue. Nonprofit organizations may plan across funds, programs, and locations. Their revenue may be uneven as a result of membership or pledge drives, or other fundraising events. Retail companies may plan by store and location, modeling revenue associated with new store ramp-up. Software companies need to plan revenue over the life of contracts, resulting in revenue recognition and deferred revenue planning needs. Healthcare revenue planning often needs to be associated with multiple dimensions such as type of patient or type of service offered, as well as other variables such as length of patient stay, or patient insurance type. Energy and utility companies also need to utilize driver-based planning, with drivers such as kilowatt hours, gallons, cubic feet, and tons, as well as various rates, usage, and pricing variables.

And across all industries, revenue planning is often done by the sales team, who may not have much training in using financial planning tools, and who probably have no IT or programming skills.

Integrating actual sales data from a CRM or other enterprise system is also a common need in revenue planning. Many revenue plans begin with the integration of detailed sales data — units and pricing, sliced by various dimensions.

Spreadsheet-based planning is unable to handle these requirements. What’s needed is a purpose-built planning application, intuitive and easy to use, even for non-finance staff, with a centralized database and automated data integration capabilities, plus driver-based modeling capabilities, and flexible reporting and analysis tools. What’s needed is Adaptive Planning.

Adaptive Planning offers tremendous functionality and multiple choices of planning approaches in the area of revenue planning.

• Automatic Integration with Sales Data. Easily and frequently import detailed or summarized sales data from your CRM or other sales tracking system, using our automated data integration capabilities.
• Unlimited Custom Dimensions. Create as many dimensions as you need to track revenue and drive costs, e.g., product, product type, customer, channel, sales rep, region, etc.
• Lookup Tables. Use lookup tables to assign values or assumptions to specific dimensions. E.g., assign prices to products. These lookup tables can then be easily folded into formulas, removing the need for complicated IF statements. Lookup tables are a good fit when administrators want to control price assumptions.
• Cube Sheet. Utilize this special sheet to facilitate multi-dimensional sales forecasting. Associate multiple dimensions with the cube sheet; then users can use drag-and-drop to change which dimensions (including time) are seen in the rows and columns of the sheet. A cube sheet is a good fit when price for a product varies by customer or by country, or when users want to enter their own pricing assumptions.
• Customizable Data Entry Columns. Use another kind of sheet to create sales planning data entry columns to suit your planning needs. Columns can include product, customer, contract date, units, etc.
• Spread Tables. Use these tables to spread values over time. These tables are powerful modeling tools for companies that want to plan bookings, for example, and then spread those values over the life of a contract. Multiple spread tables can be associated with a value or dimension. For example, one spread table can be used to plan revenue recognition of bookings, and a second spread table can be used to plan invoicing of the same bookings. These spreads can be easily folded into revenue and balance sheet (accounts receivable and deferred revenue) formulas.
• Other Driver Based Planning. Use Adaptive Planning’s powerful modeling capabilities to drive costs, staffing requirements, capital spending, etc. from the sales plan.
• Reporting. Use our drag-and-drop report builder to easily sort and subtotal reports on any or all sales planning dimensions.
• What If Scenario Analysis. Use Adaptive Planning’s modeling and reporting capabilities to easily perform what-if analyses based on different revenue scenarios.

In addition, Adaptive Planning offers a Sales Planning & Analysis Solution, which leverages the Adaptive Planning Connectors for integration with CRM applications, and the powerful Adaptive Planning Multiple Instance functionality, allowing automatic consolidation of sales pipeline data with financial planning data.