Using Sales Forecasting

Sales forecasting consists of two elements, the Sales Forecast report, and one or more Sales Opportunity Documents.

sales forecasting

Sales Opportunity Documents are used by Salespeople to:

  • Record opportunity detail at the Line Item (SKU) level.
  • Set the probability and weighting (see below).
  • Submit their forecast ‘up the line’.
  • Track their progress against a period target.

Create Sales Opportunity

Tip: Before you create a Sales Opportunity be sure to set up your Opportunity Stages (see below).

You can create a Sales Opportunity from:

Customer > Action > New Sales Opportunity

Prospect

Action > New Sales Opportunity

Sales Opportunity List

Sales Opportunities > +

Sales Quote

Action > New Sales Opportunity

Cash Purchases

Action > New Sales Opportunity

The new Sales Opportunity will retain an ‘Our Ref’ link to the originating Document/Trading Partner.

Create a Sales Document from a Sales Opportunity

For the purposes of expediency, you can create these Documents from a Sales Opportunity:

  • Sales Quote
  • Sales Order
  • Sales Invoice
  • Cash Sales

The new sales Document will retain an ‘Our Ref’ link to the originating Sales Opportunity.

The system allows three levels of forecast reports.

sales forecasting main

Create Sales Forecast

Sales Forecasting > Sales Forecasts > +

Sales Opportunites update these fields in Sales Forecasts:

Standard

The sum of the closed and committed Sales Opportunities during the specified period.
Closed
Committed
Total

Weighted

The weighted sum of the close and committed Sales Opportunities during the specified period multiplied by the stage probability.
Example: $3,186.40 x 100% (Stage is definite, which equals 100%) = $3,186.40.
Closed
Committed (Weighted)
Total (Weighted)

Pipeline

The total committed revenue even if the Opportunities do not lie in the specified period.
Pipeline
Pipeline (Weighted)

Sales Forecast Analysis

The Sales Forecast Document has tabs which allow you to view:

  • All opportunities
  • Opportunity by Owner
  • Opportunity by Customer

Cash Flow Forecast Input

Opportunites on the Sales Forecast appear in the Cash Inflows section of the Cashflow Forecast. See ‘Using Cash Flow Forecast’. The Cash Flow Forecast is located here:

sales forecasting 2

Cash Flow Forecast users can customize this report to omit/include Sales Forecast inputs:

Banking > Cash Flow Forecast > Action Bar > Customize > Cash in tab > Sales Forecast

Submit Sales Forecast

To submit a Sales Forecast

Sales Forecast > Submit Forecast

Once a Sales Forecast is submitted, it cannot be edited and no new Sales Opportunities can be added/removed. 

Setup Opportunity Stage

Setup > Configuration > Sales Forecasting > Sales Opportunity > New Opportunity Stage

  • Stage name, i.e. engaged
  • Description, i.e. ‘actively seeking information and attention’
  • Percentage, i.e. 40%
About Opportunity Stages

Opportunity Stages apply the weighting to the entire Sales Opportunity.

Opportunity stages represent the sales funnel stages and their respective probability. The basic idea is, as an opportunity progresses through a series of stages its probability of converting to a sale increases by a percentage. 

For example, a stage describing the prospect as being ‘engaged’, meaning they are actively seeking information and repetitively asking for your attention might indicate a probability of 50%, therefore the deal is weighted at 50%, and the deal value is forecast at 50% of its total value. 

If you have a wide range, or high flow of Sales Opportunities at every stage of your sales funnel and you need a simple method to forecast potential sales, then using weighted forecasting is probably the best approach. 

Each stage would be defined by the information you uncover and confirm. The more you know, the easier it can become to predict the outcomes. For example, “at this stage, if this happens, or we have this information” then in 4 out of 10 cases the deal closes. In other words, at this stage, the probability of this deal, in these circumstances at this time is 40%. 

Regardless of whether you have a high or a small number of Sales Opportunities, if you closely examined the probability of each one, you would probably discover a pattern of stages. 

This analysis can be time-consuming, it’s all about recording, measurement and testing assumptions. To do this efficiently you need a sales forecasting system. As we all know, what gets measured gets managed. 

Either begin with some simple opportunity stages (you can evaluate the stage’s merit over time) or just transfer your current process into stages.

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