A revenue forecast offers a holistic view of your financial state by assessing your historical revenue and expenses, as well as your future plans, budgets, and sales projections.
Questions to ask when conducting your revenue forecast planning:
- What constituents are involved in collecting the data for your revenue forecast and is their input being fairly represented? (i.e., sales, marketing, accounting, etc.)
- How much complexity is in your business model and how far into the future will you be planning?
- How precise can you get your revenue forecast currently?
- How many scenarios can you run in real time and how often? (“What If?” Analysis)
- How many variables are you attempting to manage and analyze? (i.e., headcount increase or decrease, new product launches, geographic expansion, economic trends, seasonality, etc.)
- How important is it to get your revenue forecast from feasible to optimal?
- Are you using data analytics to do the heavy lifting for your revenue forecast?
If you answered “no” to the final question, Data41 can lighten your load and make revenue forecasting a whole lot easier.
- Data41 can collect the input from your constituents by aggregating and organizing the data from your source systems. We will provide the analytics infrastructure for your forecasting process.
- Data41 can genuinely curate the right analytics strategy for you based on the complexity of your business model.
- Data41’s team of experts will help you deploy this strategy with the tools and technology that support your goals and get you the most precise revenue forecast possible.
- Data41’s team of experts can provide an environment that helps you develop sandboxes to run different scenarios in real time. This will ensure greater options leading to precision in your forecast.
- Data41’s team of experts can help you manage multiple variables and explore how different factors may affect your revenue forecast.
- If you choose to further your analytics strategy, Data41 can help you implement Machine Learning/Artificial Intelligence (ML/AI). Drawing insights from data analysis and weighing the pros and cons, these tools will present you with the most feasible revenue forecasts, as well as the most optimal.
How does an accurate forecast benefit you? Well, it improves decision-making about the future, reduces risk in sales pipeline, aligns sales quotas and revenue expectations, and serves as a benchmark to assess future trends. 97% of companies that implemented advanced revenue forecasting achieved their quotas, as opposed to the 55% that did not.
Revenue forecasting can help companies measure their monthly recurring revenue (MRR), annual recurring revenue, and their future financial health. Having an accurate revenue forecast gives companies greater control over their internal operations; this includes anticipating future sales, tracking data to reveal areas of improvement, and understanding customers’ behavior. Revenue forecasting is designed to help your company enhance its performance and meet (or even exceed) its goals.
By implementing data analytics through advanced technologies like IBM Planning Analytics, Data41 can help you specify the actions necessary to achieve these projected outcomes and the interconnected effects of each decision.
Related sources:
https://info.intangent.com/blog/6-shocking-statistics-about-sales-forecasting
https://www.aviso.com/blog/revenue-forecasting/
