How do you configure sales forecasts?
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The forecast is only as good as the setup and data discipline behind it. Here is the sequence that produces a figure people trust.
- 6 steps
- Total time: 2 h
- Preparation: 1 h
- Result: A forecast used in the management meeting
Required tools
- Dynamics 365 Sales — With access to forecast configuration.
- Clarified sales hierarchy — Who reports to whom.
Set the framework
1.Select a period that follows the business
Monthly or quarterly, in line with the financial statements. If the periods differ, you will end up with two sets of figures that never match and an ongoing discussion about which one applies.
2.Build the hierarchy correctly
The forecast rolls up through the sales hierarchy. If it is incorrect, deals will be assigned to the wrong manager and the totals will not add up. Check this before activating.
3.Define the categories in writing
What does commit mean to you? Write it down and share it. Without a shared definition, the figure is a sum of different assessments.
Start using it
4.Run the first period in parallel
Let the forecast run alongside what you are doing today. This allows you to identify discrepancies and determine the cause without putting anything at risk.
5.Clean up closing dates first
Deals with a past date immediately distort the forecast. Review them before the first run; otherwise, the initial impression will be that the figure is incorrect.
6.Measure accuracy each period
Compare the forecast with the actual results. If you are consistently thirty percent too optimistic, that is a known bias you can correct for—and it will not disappear unless someone measures it.
Discussion
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