Sales forecasting and revenue analysis

Sales forecasting is a bit like landing a jetliner. You don’t just put the plane down when and where you want to land. You need to start making decisions about your approach, your speed, your angle and your altitude dozens of miles away from your destination. As for sales planning, you can’t just pull a number out of thin air and call it your forecast. You need to say where the business will land that quarter, what resources are needed and articulate the plan to get there.

Landing on an accurate sales forecast

For publicly traded companies, reporting an accurate sales forecast is a key indicator of the three things every investor looks for: success, reliability, and stability. Everything sales and finance teams do that quarter is singularly focused on landing within that forecast range.

In addition, the sales forecast is the basis for allocating resources, making new hires, increasing quotas and managing costs. This balancing act of revenue and expenses is highly dependent on using the right sales forecasting tools to gain visibility into the business so you can know how close your forecast will be to the actuals.

The challenges of sales forecasting with static planning

Forecasting revenue with manual consolidation of offline spreadsheets makes a complex task even more difficult. Modeling staffing, quotas, territories, and other variable costs with a static spreadsheet is wildly inefficient, not to mention prone to errors or version control issues. Updating the spreadsheet with new data or new assumptions can feel like starting from scratch. And because revenue forecasting depends on close collaboration with sales ops, it can be difficult to get the data you need when you need it.

On the other hand, an active planning process makes revenue forecasting a far simpler process.