Predicting Future Revenue with Sales Forecast!

Who is optimistic early in the sales cycle?

Why has the pipeline increased or decreased?

Which deals are being stalled?

How much revenue will we get in 2021?

What is the average level of sales we make to each customer?

 

Sales team always consider these and many other questions especially before deciding about the estimating future sales. And why? Because Sales play a key role in the building of loyalty and trust between customer and business. It is a lifeline of any business and if we know of what to expect in the future will help in making informed decisions. And by sales forecasting, we get a clear picture of how much new revenue the company will generate in each period. It gives you the right insights and helps you take the important steps towards robust growth. It is a powerful tool and method to lay future sales by using historical data, industry-wide comparisons, and economic trends. The purpose of sales forecasting is to plan and go about achieving forecasted sales in what management considers to be the most effective manner. There are 3 types of forecasting techniques-qualitative techniques, time series analysis and projection, and causal models.

Let us see advantages of Forecasting:

A well-researched and detailed farecasting backed by market trends, facts and predictions can help you to bring more investors and lenders by proposing them that your business is a profitable and smart investment.

Sales forecast is a key factor in business operations and is the basis of sound budgeting. Many other services and facilities such as setting labor needs, purchasing raw materials all basically depends on sales forecasting.

It is a basis for salesforce planning helping sales executive to fix the budget for the department and affect its sales quotas and compensation.

Sales Forecast is the key to sales management success as it tells where customers are located and predicting how much they will buy.

Sales forecasting provides insights to purchasing department to better plan their purchases more effectively from a price and delivery viewpoint.

The role of sales forecast is much clear for better financial planning and costing functions providing long term profit plans and income flows.

Sales forecasting helps in marketing with the help of sales strategies and plans such as recruitment of additional sales personnel, remuneration plans, promotional expenditures, etc.to achieve forecasted sales.

Sales forecast also assist in research and development

Sales forecasting helps in better Inventory control by removing the unnecessary costs and difficulties of storing the raw materials.

Source: (https://www.neenopal.com/Sales-forecast.html)

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