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This guide also applies to on-premise implementations

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1 Manage Sales Planning and Forecasting

This chapter contains the following:

Sales Forecasting Features: Overview

Sales Forecast Components: How They Work Together

Sales Forecast Adjustments: Explained

Unallocated Forecast Adjustments: Explained

Export of Forecast Data: How It's Processed

FAQs for Manage Sales Planning and Forecasting

Sales Forecasting Features: Overview

Forecasting future sales is a method of providing predictions of future revenue for specific time periods. Sales forecast data is used to set production schedules and volumes to determine resource requirements to effectively meet customer demand and to report financial guidance to investors.

Summary of Features

The key features of sales forecasting include the following:

  • Forecasts are generated for each sales territory and are then rolled up following the territory hierarchy. Changes to the active territory hierarchy are periodically synchronized with the forecast hierarchy. A date is set after which the hierarchy is frozen, and the forecast is available for editing.

  • The schedule of forecast periods is predefined.

  • Salespeople finalize their territory forecasts for the current time and submit them to the owners of parent territories. Owners of higher-level territories can view, change, and adjust forecasts at lower levels in their hierarchy.

  • The forecast for a period is automatically generated from eligible opportunity revenue items scheduled to close within the period. Forecasts are refreshed from the pipeline revenue in real time, and forecast item changes are written to the opportunity immediately. Opportunities and forecast items maintain their synchronicity until the forecast items are submitted for final approval.

  • You set the criteria that determine whether a revenue item is eligible to be automatically included in a forecast.

  • You can provide the option for salespeople to override the established criteria and manually include or exclude a revenue item from the forecast.

  • Nonrevenue forecasts allow nonprimary salespeople to forecast sales expectations for all nonrevenue sales credits. You can record nonrevenue forecasts on opportunity revenue transactions in addition to the revenue sales credit split.

  • You can view current, future, and past forecasts. The current forecast is open for editing at certain times and then frozen.

  • You can adjust forecasts. A revenue-item adjustment is an upward or downward adjustment to a specific forecast item: Revenue, Best Case, or Worst Case values. A summary adjustment is an upward or downward adjustment to the overall territory forecast that is not associated with any specific deal. Adjustments are visible to higher levels in the hierarchy, but not to lower levels.

  • Use predefined graphs to analyze forecasts, or add your own graphs.

Sales Forecast Components: How They Work Together

A sales forecast for a territory encompasses a time period and sales opportunities that meet defined criteria. Salespeople submit their forecasts to their managers, who make any needed changes and in turn submit the forecasts to their managers.

This figure shows the components for a territory forecast. Revenue items from opportunities form the unadjusted forecast. If the revenue item has multiple sales credits, then the revenue item is visible across multiple forecasts. Salespeople add adjustments to the forecast. Adjustments can be applied at a summary or item level.

Components of a Forecast

Revenue Items

A revenue item from an opportunity must have a designated close date that falls within the forecast period to be included in the forecast.

The criteria for the revenue item must match the criteria set for the forecast. For example, if the forecast criteria specify a win probability of greater than 75 percent, then a revenue item with a win probability of 80 percent is added to the forecast.

If the ability to override is enabled, then a salesperson can include a revenue item in the forecast even though it does not match the criteria, or exclude a revenue item that matches the criteria.

It is possible for managers to pull in forecast items as adjustments that do not match the close date or criteria and override conditions.

Unadjusted Forecast

The unadjusted forecast is the total of all revenue items that match the forecast criteria or that are included by overrides. All revenue items must have close dates within the forecast period.

Salespeople can add a positive or negative adjustment on top of the unadjusted forecast to form an adjusted forecast.

Managers and nonrevenue credit recipients can pull in forecast items as adjustments that do not match the close date or criteria and override conditions. Also, managers and nonrevenue credit recipients can drop items as adjustments, regardless of close date or match and override conditions.

Sales Forecast Adjustments: Explained

An adjustment is a positive or negative number that adjusts your own or a subordinate's unadjusted forecast up or down.

The adjusted best case forecast is the sum of:

  • The best case for all forecasted items

  • The sum of item-level adjustments for the best case

  • Any summary level adjustment to best case

The adjusted worst case forecast is the sum of:

  • The worst case values for all forecasted item

  • The sum of item-level adjustments for worst case

  • Any summary level adjustment to worst case

The estimated adjustment metric is the sum of the difference between estimated revenue and revenue for all transactions in the forecast period. Sales Predictor uses statistical analysis to provide the estimated revenue amounts based on historical sales for the product associated to the revenue item.

You enter summary level adjustments by selecting Adjust from the Actions menu.

If you forecast by product, by product and channel, or by product, channel and time, then your administrator enables the Forecast Summary tab that provides different views for making detailed adjustments, and the adjust action is no longer available.

Unallocated Forecast Adjustments: Explained

In the Forecast Summary tab , whenever a parent has children, an additional child is added called Unallocated. A deal that is for the parent itself appears as unallocated until you can determine which child to move the deal to. When an adjustment is made to the parent the adjustment amount appears in the Unallocated child row until you distribute it among the children using one of several ways.

You can manually alter the children until the unallocated amount reaches zero. If you over-allocate without reaching zero, then the unallocated amount can become negative.

Use the Allocate to children action to divide the amount up proportionately amongst the children based on the percentage that each child makes up the parent adjusted forecast. If all children are zero, then the amount is divided equally. If you allocate to grandchildren, then the process is the same except that the amount is allocated to both children and grandchildren, but not farther down the territory hierarchy.

Recalculate from Grandchildren changes the selected parent's children so that each child is equal to the sum of the value for the editable grandchildren. It also changes the selected row to equal the sum of the value for the newly recalculated children so that unallocated is zero for the selected row in addition to being zero for the children of the selected territory. Recalculate from Children changes the selected row so that the value is equal to the sum of the value for the children, and unallocated is zero.

Forecasting by Product and Time

Start your forecast adjustments at the product level and if required then spread your adjustments across product and time. When you start at the summary level, by product, then your adjustments appear as unallocated amounts for time as well as for lower levels of the product hierarchy. You then need to divide the unallocated amounts down the product hierarchy and among the dimensions for time.

You can choose to forecast only by product, or by product and time.

Export of Forecast Data: How It's Processed

You can export visible forecast data to spreadsheet, if you have the correct privileges.

How Forecast Export Is Processed

The forecast data is exported to an .xls file only. Your version of Microsoft Excel may only support 64,000 rows.

Hidden information does not export. Therefore, you need to expand territory hierarchies and reveal any hidden columns to include them in your export.

FAQs for Manage Sales Planning and Forecasting

How can I add revenue items to a forecast?

To add revenue items to a forecast, search for revenue line items in your territory and add them to the forecast. For any revenue item with a warning icon, you must change any attributes that do not meet the forecast criteria. When all attributes fall within the forecast criteria, the revenue item becomes part of your forecast.

You can also use a forecast override if the administrator enabled it for your territory. You can set Forecast Option to Always to override the lack of matching forecast criteria. An icon warns you when a revenue item does not match the forecast criteria and requires the forecast override.

If you are unable to edit the forecast item you are adding, then the item is added with the unadjusted forecast amount set to zero. However, the item now has a positive adjustment amount to match the original revenue item revenue amount. For example, if the revenue amount is 3,000, then the unadjusted forecast is 0, the forecast adjustment is 3,000, and the adjusted forecast is 3,000. You can further refine the adjusted forecast item amount, or remove the forecast item if you no longer want the item included in the forecast.

How can I remove forecast items from a forecast?

Select the forecast item and click the remove icon. For any revenue item with a warning icon, you must change any attributes so that the revenue item does not meet the forecast criteria or so that the forecast item no longer closes within the forecasting period.

You can also use a forecast override if the administrator enabled it for your territory. You can set Forecast Option to Never to override the matching forecast criteria. An icon warns you when a revenue item matches the forecast criteria and requires the forecast override.

If you are unable to either change the forecast criteria for the item or use the override, the item disappears from your forecast items list, but the unadjusted forecast amounts remain the same. However, the item now has negative adjustment amounts to match the unadjusted forecast amounts. For example, if the unadjusted forecast amount is 3,000, then the forecast adjustment is negative 3,000 and the adjusted forecast is 0. With the removed forecast item selected, you can add it back in if you want to include the item back in the forecast.

When does my forecast appear in my currency?

If your currency is different from the corporate currency, then select the desired currency. The default selection is your preferred currency. In addition to seeing information in your currency, you will also see some information in the corporate currency. Forecast item detail transaction information remains in the transaction currency.

When do I submit my forecast?

You can submit your forecast after the territory freeze date and before the forecast due date. Make all of your item and summary forecast adjustments. You can submit your child territory forecasts on behalf of your subordinates and then make adjustments to your forecast before submitting.

What happens if I submit my forecast?

You cannot make adjustments or update your forecast after you submit it. Your manager can make adjustments to your forecast only after your submission. If your manager rejects your forecast, you can further adjust the rejected forecast and then resubmit it.

What happens if I filter by adjusted forecast?

When you view the territory forecast by product in the Forecast Summary tab, you can select to filter by adjusted forecast. The table then displays products within the selected territory definition that have either an adjusted forecast value or an adjustment value that is not zero.

What happens if I select Forecasted by Parent Territory?

The territory is hidden in the Forecasting Overview page, but is available on the Edit Forecast page. The owner of the parent territory can submit the forecast for the child territory. If the child territory owner also owns the parent territory, then the territory owner can edit forecast items, add and remove forecast items as adjustments, and adjust the territory forecast.

What's a likelihood to buy product?

The likelihood to buy product metric reflects the percentage of confidence that a deal will close with the specified revenue on the specified close date. Sales Predictor uses statistical analysis to provide the likelihood to buy product based on historical sales for the product associated to the revenue item.

What's an estimated revenue?

Estimated revenue is the potential revenue from the revenue line item. Sales Prediction Engine uses statistical analysis to provide the estimated revenue amounts based on historical sales and other metrics for the product associated to the revenue item.

What's a pipeline?

The pipeline metric is the total revenue amount of all revenue line items where the Status category is Open, the primary territory is the target territory, and the close date lies in the forecast period. Unforecasted pipeline is the total revenue amount of all revenue line items without a corresponding forecast item, where the status category is Open, the primary territory is the target territory, and the close date lies in the forecast period.

What's an expected forecast?

The expected forecast metric is the sum of all weighted revenue values for all forecast items in the forecast period. Weighted revenue is the revenue amount multiplied by the probability of the deal closing.

What's a quota?

The quota metric is the revenue target associated with the expected performance of a salesperson's territory for a given forecast period.

What's closed revenue?

The closed revenue metric is actual revenue for the target territory that was closed during the forecast period.

What's a best case forecast?

The best case forecast metric is the sum of all best case revenue values for all forecast items in the forecast period. You can enter the best case revenue amount when you change the revenue line item details in an opportunity.

What's a worst case forecast?

The worst case forecast metric is the sum of all worst case revenue values for all forecast items in the forecast period. You can enter the worst case revenue amount when you change the revenue line item details in an opportunity.

What happens if I allocate an adjusted forecast to children?

The unallocated amount for a parent is added to the amounts for all the children so that the unallocated is zero.

The unallocated amount is divided up proportionately amongst the children based on the percentage each child makes up the parent adjusted forecast. If all children are zero, then the amount is divided equally.

Why did the parent adjusted forecast not change when I adjusted the child?

The unallocated amount at the child level must be zero for adjustments to be added directly to the parent total. Child level adjustments are added to or subtracted from the unallocated amount until unallocated is exactly zero.