This guide also applies to on-premise implementations

11Managing Forecasts

This chapter contains the following:

Sales Forecasting Features: Overview

Forecasting future sales is a method of providing predictions of future revenue for specific time periods. Management uses sales forecast data to set production schedules and volumes, to determine resource requirements, and to report financial guidance to investors.

Summary of Features

The key features of sales forecasting include the following:

  • Salespeople can view, manage, and submit their forecasts in the office and using the mobile application. Specifically, salespeople can:

    • Review their forecasted product items and submit the forecast.

    • View their unforecasted pipeline.

    • Use embedded analytics to improve forecast accuracy.

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

  • Sales managers can review and adjust their forecasts wherever they are. They can view the latest forecasting data and compare it to key metrics such as pipeline and won revenue.

  • Sales managers can quickly see which salespeople have submitted their forecasts, what has changed since the previous forecast, and the opportunities that comprise the forecast. Sales managers can also drill into their subordinates' forecasts to view a forecast the same way that the salesperson sees it. This provides sales managers with the opportunity for more effective coaching and greater forecast accuracy.

  • Sales managers can add, remove, or adjust individual lines in a salesperson's forecast, segment the totals by time period, and override forecast totals for each salesperson. Any adjustments are clearly identified throughout the forecast hierarchy, allowing management to quickly view the changes made by sales managers on their team.

  • Forecasting reflects any edits made to an opportunity, or any adjustments made at the deal level in real time.

  • You forecast sales by territory. The forecasts roll up following the territory hierarchy. Changes to the active territory hierarchy are periodically synchronized with the forecast hierarchy up until a freeze date. After the territory freeze date, salespeople can make changes to their forecasts.

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

  • The forecast for a period is automatically generated from eligible opportunity product items scheduled to close within the period. Forecasts are refreshed from the pipeline revenue in real time. Opportunities and forecast items continue to synchronize until the salesperson submits forecast items for final approval.

  • The sales administrator sets the criteria that determine whether a product item is eligible to be automatically included in a forecast.

  • The sales administrator provides the option for salespeople to override the established criteria and manually include or exclude a product item from the forecast.

  • If enabled, you can forecast by product for a territory, forecasting amount and quantity.

Adding Opportunity Items to Your Forecast

Watch video

Watch: This video tutorial shows you how to add opportunity line items to your sales forecast.

About Forecasting by Territory, Product, or Unit

You can forecast sales by territory and amount, by product and amount, or by product and quantity of units. A forecast covers a specified time period, such as quarter or month. A territory owner submits the current forecast to the owner of the parent territory, who is likely the owner's manager.

The application generates the forecast by capturing information from opportunity lines as follows:

  • Opportunity items are placed in time periods according to the planned or actual close date.

  • Only opportunities that meet the forecast criteria are included in a forecast.

  • Opportunities assigned to a territory are added to the forecast for that territory.

Forecasting Amounts by Territory

The territory owner forecasts the amount of sales for the territory by time period. The sum of the amounts for all included opportunity items is the forecast amount.

Salespeople and sales managers can then, for their territory:

  • Manually add opportunity items to their forecasts or remove them.

  • Change the amounts for individual forecast items.

  • Make adjustments by changing the total forecast amount for individual time periods for a subordinate's territory forecast.

  • Make adjustments to the amounts for a subordinate's forecast items.

Use the Edit Forecast page Territories tab and Forecast Items tab.

Forecasting Amounts by Product

Within the territory, the territory owner forecasts the amount of sales for each product by time period. The forecast amount for each product is the sum of the amounts from opportunity items for that product.

Salespeople and sales managers can then, for their territory:

  • Manually add opportunity items to their forecasts or remove them.

  • Change the amounts for individual forecast items.

  • Make adjustments to the individual product amounts by time period.

  • Make adjustments to the amounts for a subordinate's forecast items.

  • Make adjustments to the product amounts for a subordinate's territory forecast.

Use the Edit Forecast page Products tab and Forecast Items tab.

Forecasting Unit Quantities by Product

Within the territory, the territory owner forecasts the quantities of each product by time period. The forecast quantity for each product is the sum of the quantities from opportunity items for that product.

Salespeople and sales managers can then, for their territory:

  • Manually add opportunity items to their forecasts or remove them.

  • Change the quantities for individual forecast items.

  • Make adjustments to the individual product quantities by time period.

  • Make adjustments to the quantities for a subordinate's forecast items.

Use the Edit Forecast page Products tab and Forecast Items tab. In the Products tab, select to show Quantity or All Totals.

Managing Your Forecast

Watch video

Watch: This video tutorial shows you how to manage the forecast for your team.

Sales Forecast Adjustments: Explained

Changes you make to the original forecast up or down are adjustments. If your forecast is by product, then you can adjust quantities as well as the amounts for individual forecast items.

Depending on your configuration, you can adjust the following:

  • The amounts for individual forecast items

  • The total amounts for each territory owned by your subordinates and by time

  • The total amounts by product and also by time period for your territory

  • The quantities for individual forecast items

  • The total quantities by product and also by time period for your territory

Removing Adjustments

To remove all of your adjustments, go to the Actions menu and select Remove My Adjustments.

Copied Forecasts

If you copy the prior forecast, then your copy takes the total forecast numbers from the previous forecast, including adjustments, and pastes them into your current forecast. These numbers overwrite any calculated totals from rolled up opportunity or adjustment data.

Adjusted Best Case and Worst Case Forecasts

The adjusted best case forecast is the sum of:

  • The best case for all forecasted items

  • 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 items

  • Item-level adjustments for worst case

  • Any summary level adjustment to worst case

Copying the Prior Forecast: Explained

Use the Copy Prior Forecast action to ignore the rolled up opportunity data and copy the numbers from the previously submitted forecast to the current forecast. Your copy takes the total forecast numbers, including adjustments, and pastes them to your current forecast. These numbers overwrite any calculated totals from rolled up opportunity or adjustment data.

Forecasting Actions and Consequences: Explained

Salespeople modify their active forecasts during the submission window and submit them to their managers. Managers then adjust their forecasts and submit them to their managers.

The user actions described in the following table are available during the submission window, before a user submits his forecast. The only exception is the withdraw action, which is available after the user submits his forecast and before his manager also submits or adjusts her forecast.

Role Action Result

Sales Representative

Make changes to opportunities

Add or remove forecast items

The forecast is updated to reflect changes.

Sales Representative

Submit his forecast

The forecast is frozen. The salesperson can't make changes.

Sales Representative

Withdraw his forecast

The sales representative can again make changes to the forecast and resubmit. Forecast numbers now update from the pipeline.

Sales Manager

All actions of the sales representative also apply to the sales manager

All results of the sales representative also apply to the sales manager.

Sales Manager

Adjust numbers for forecast items

Adjust totals, including copy previous forecast totals to the current forecast

If previously unsubmitted, all subordinates' forecasts are submitted and frozen when the manager edits his forecast. The subordinate's forecast is frozen and can't be changed by the subordinate. All direct and indirect subordinates can't make changes unless the manager removes her adjustments and rejects each subordinate's forecast.

Forecast numbers no longer update from the pipeline. The adjustment becomes the current forecast and ignores the rollup values from current forecast items.

Sales Manager

Submit a subordinate's unsubmitted forecast

The subordinate's forecast is frozen and can't be changed by the subordinate. All direct and indirect subordinates can't make changes to the forecast unless the manager removes her adjustments and rejects each subordinate's forecast.

Forecast numbers no longer update from the pipeline.

Sales Manager

Remove adjustments

Adjustments are removed. Opportunity changes are ignored for as long as the subordinate's forecast remains submitted.

Sales Manager

Reject a subordinate's forecast

The application will clear all adjustments made by the manager to the subordinate's forecast.

The subordinate can again make changes to the forecast and resubmit. If the subordinate is a sales representative, then the forecast numbers now update from the pipeline.

Application

The application detects that the submission window has passed

After the end of the submission window, everyone's current forecast is frozen regardless of submission status. The next forecast is then available to view.

Application

The application detects that a new submission window has started

At the start of the next submission window, a completely new forecast snapshot is available, and everyone's forecast is ready to be submitted and adjusted again.

Forecasting: Available Metrics

Metrics provide calculated measures based on historical or current transactional data. Salespeople can refer to metrics when making forecasting decisions. Your administrator enables one or more metrics. Disabling a metric hides the metric from the user interface and speeds up the execution time for certain background processes.

The following table shows the available metrics and how they are calculated:

Metric Description

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 product line details in an opportunity.

Closed Revenue

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

Estimated Adjustment

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.

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

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 prediction uses statistical analysis to provide the likelihood to buy product based on historical sales for the product.

Pipeline

The pipeline metric is the total revenue amount of all product lines 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 product lines 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.

Quota

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

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 product details in an opportunity.

FAQs for Managing Forecasts

How can I add forecast items to a forecast?

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

You can also use a forecast override if the administrator enabled it for your territory. You can set the Forecast Option to Always to override the lack of matching forecast criteria. An icon warns you when a revenue item doesn't 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 product item with a warning icon, you must change any attributes so that the product item doesn't 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 the Forecast Option to Never to override the matching forecast criteria. An icon warns you when a product 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 make changes to your forecast and submit it during the submission window. 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 can't make adjustments or update your forecast after you submit it. Your manager can make adjustments to your forecast only after your submission. You can use the Withdraw button to withdraw your submission, unless your manager changed or adjusted your forecast or submitted the manager's forecast. If your manager rejects your forecast, you can make further changes to the rejected forecast and then resubmit it.

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.