Sales forecasting software predicts future sales based on market trends, historical data, and other relevant factors. It assists businesses in estimating demand, optimizing inventory, and making informed decisions. It provides accurate projections to guide sales strategies and maximize revenue potential. Common sales forecasting methods use qualitative and quantitative methods to help you predict total sales, revenue, and new business.

You’ll also need to make sure your data ecosystem is clean, connected, and accessible to the entire organization. Businesses use forecasts and projections to inform managerial decisions and capital allocations. Analysts use forecasts to estimate corporate earnings for subsequent periods. Economists may make more macro-level forecasts as well, such as predicting GDP growth or changes to employment. The right forecasting method will depend on the type and scope of the forecast.

Workday Adaptive Planning

Whether met, exceeded, or missed, the forecast responsibility falls on them. Once the numbers are added to the equation, you’re ready to take the steps on discovering how to calculate your sales prediction. It should be noted that if your equation is used to determine deals closed, customers created, or units sold, an extra step is required to calculate the actual revenue anticipated. This means taking sales forecasting definition what you calculated and multiplying it by an average value per deal, sales per transaction, or price per unit. No matter which method you use, you must gather and organize the data needed to perform that method. For the historical trend method, you will gather data from previous years for sales revenue, units sold, deals closed, growth percentages, seasonality trends, and historical demand.

Opportunity stages forecasting allows you to calculate the chance of closing a future deal at each stage in the sales pipeline. To see a glimpse of what sales forecasting looks like inside forecasting software, check out this video from the HubSpot Sales Representative Professional Certificate. It’s a good idea to gather information from marketing, product, and finance teams to inform your sales forecast. Accuracy in your sales predictions provides valuable insights about where coaching is necessary or a change in strategy is required. You could also find that you’re facing unpredictable conditions in product demand, which could require a change over the short or long term. Or even better, maybe sales exceeded your forecast and that demand is up!

Sales Forecast Definition: What Is Sales Forecasting?

This makes the total sales prediction for new business in this scenario $79,500. It’s the total of the expected deal values ($15,000 + $10,000 + $4,500 + $24,000 + $12,000 + $14,000). A user-friendly interface that simplifies the process of inputting data and interpreting forecast results is crucial, especially for businesses without dedicated data analysts. At this point, you’ve defined your sales process, goals, and set quotas.