Sales forecast
A sales forecast is an estimate of how much revenue to expect in a given period, based on open deals, invoices already issued and recurring fees.
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What does Sales forecast mean?
The most common method is the weighted pipeline: each open deal's value is multiplied by its stage's probability, and the results are added up. A deal worth HUF 1 million at the "quote sent" stage with a 40% probability counts as HUF 400,000.
The sources of a forecast are not equally certain. An issued, unpaid invoice is a debt, a contracted recurring fee is close to certain, but the weighted pipeline is an estimate. Mixed into one number, the estimate looks certain.
Why does it matter to a small business?
In a small business a forecast helps you decide in time: whether you can take on another person, order materials in advance, or should chase quotes right now. When estimated and certain income are shown apart, you build on what you can really count on, not on the most optimistic number.
What does it look like in practice?
Details
Suppose a software company in Kecskemét has, for next month, HUF 600,000 in issued unpaid invoices, HUF 300,000 in contracted monthly fees and HUF 2,000,000 in open deals at an average 25% probability. The weighted part is HUF 500,000, but they look at it separately, as an estimate.
How does HelloTeam CRM handle it?
Details
HelloTeam's reports keep invoiced debts, contracted recurring invoices and the weighted pipeline apart in the cash-flow forecast, because they are not equally certain. Stage probabilities also give a weighted forecast of open deals.
Module: Reports (free).