Sales Forecasts

You can also use sales forecasts to help measure the sales organization's productivity. Using the Manage Forecasts program (P90CB060), you select a group of sales opportunities and create a sales forecast based on those opportunities. The system calculates the amount of revenue that is associated with the selected group of opportunities. If necessary, you can override this amount. Because you control which opportunities are included in the forecast, and you can override revenue amounts, the sales forecast typically provides you with a more accurate view of potential revenue than the sales pipeline.

You can update a sales forecast as many times as necessary. When you feel that the forecast accurately depicts future sales, you can freeze the forecast. When you freeze a forecast, the system creates a point-in-time record of the opportunities that are associated with the forecast. You can use this information to compare actual revenue to forecasted revenue and analyze the causes of large discrepancies between these two amounts.

For example, if a large opportunity is lost after a forecast is frozen, the actual and forecasted revenue amounts will likely be very different. You can compare the opportunities that were included in the forecast, as they were when the forecast was frozen, against the actual opportunities that closed during the specified period. By reviewing the forecasted opportunities against those that actually closed, you can identify which opportunities were not closed as planned. You can then analyze this information and take action as necessary. You can also compare a frozen forecast against sales orders for the period or commission totals.

You can also specify whether you feel that a sales forecast is accurate enough to be considered by the manufacturing organization in their demand forecasting process by selecting the Approve for Demand Management option on the forecast.