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Creating and Using a Forecast in Salesforce for Maximum Impact

Knowing how much revenue your business will generate in the future is invaluable for planning and decision-making. This is where forecasting comes in, giving you insights into your future revenue. But, to get the most accurate insights, you’ll need not only the right historical data but also the right tool. Salesforce Collaborative Forecasts is the answer!

The Collaborative Forecasts tool uses your Salesforce data to make accurate predictions about your future revenue. So in this post, we’ll walk you through everything you need to know to get started with forecasts in Salesforce!
 

What Are Forecasts, and Why Are They Important?

In Salesforce, a forecast is a tool that helps sales teams predict future revenue by:

  • Analyzing past sales data and trends
  • Using sales reps’ intuition
  • Using tools like artificial intelligence

 

No matter what tools or technologies you use to make your forecasts, they should answer two questions:

Firstly, they should show you how much revenue each sales opportunity will bring into the business. Then, it should show you when you’ll generate this revenue. So, in a sense, a forecast in Salesforce is like a crystal ball that helps sales teams predict how much money they will make in the future.

And that’s also why forecasts are so important. By knowing what revenue you’ll generate in the future, you can make more informed decisions about your business and its processes, including hiring, inventory and supply chain management, product development, and more.

They also help you plan and allocate resources more effectively. Finally, sales forecasts can help you identify potential issues far earlier, which allows you to act before they become significant problems.
 

Collaborative Forecasting

Before June 2020, Salesforce offered Customizable Forecasting. It was a versatile tool that helped you predict sales revenue and customize your forecasts by choosing different date ranges. You could also use revenue and quantity to predict sales. To use the tool, you had to set up Customizable Forecasting and define your settings. Once it was enabled, users across your business could view and submit customizable forecasts.

collaborative forecasting in salesforce
 

Customizable Forecasting also enabled you to set your fiscal year for forecasting, select whether to forecast monthly or quarterly and create forecast hierarchies. Ultimately, Customizable Forecasting gave businesses insights into what products or services they were most likely to sell and in what quantities. The problem is that Salesforce retired this feature in June 2020, which meant that, after that date, customers no longer had access to the feature and its underlying data.

Fortunately, Salesforce replaced the feature and introduced Collaborative Forecasts. Like Customized Forecasting, Collaborative Forecasting enables your sales team to predict sales revenues and quantities more effectively.

But what is the difference between these two features? Collaborative Forecasting builds on and improves the features and capabilities of Customized Forecasting. As such, it offers a modern and robust feature set with several forecasting options, which show your sales team quantity and revenue projections right from their sales pipeline.

Sales managers can set up forecast hierarchies based on user roles or territories. This will show them forecasts by users, roles, or territories and determine how forecasts roll up.

Another distinct advantage is that, with Collaborative Forecasting, you can now use role-based product forecasting to forecast sales by product. This ability allows you to improve your inventory management.

Additionally, you can also customize forecast categories to better fit your business needs based on the opportunity stage. You can use several types of forecast categories and types to get the insights you need.

It’s also important to remember that when using Collaborative Forecasts in Salesforce, you’ll also get to use quick actions and wrapped text in the opportunity list, which are exclusive to the Lightning Experience and not available in Salesforce Classic.
 

Setting up Forecasting in Salesforce

Now that you’ve seen what Collaborative Forecasting is and some of the benefits it offers over Customized Forecasting, let’s look at how you would set it up to use it in your business:

  • The first step is to enable Collaborative Forecasting. To do this, enter Forecasting Settings in the Quick Find box from Setup.
    • From the results, select Forecast Settings.
  • Click on Enable forecasts and then click on Add a Forecast Type.
  • On the Forecasts Settings page, select a Forecast Type.
    • Here, you can choose between Opportunities or Product forecasts based on your unique requirements.
  • Once you’ve selected the forecast type, choose the appropriate Forecast Measurement.
    • Once again, this depends on your specific requirements. You can choose between Revenue and Quantity.
  • Finally, with the above options selected, you can choose the appropriate Forecast Date Type.
    • Here, your options are either Close date, Product data, or Schedule date.
  • You can then scroll down the settings page to the Select Fields to Show in the Opportunity List section.
    • In this section, you can choose the fields you’d like to appear when a user clicks on a forecast table. To do this, add, remove, and move around the fields you’d like.
  • Scroll down the Forecast Settings page to the Enabling Forecast Adjustments section.
    • Choose whether users can adjust forecasts without affecting the amounts, close dates, or forecast categories of the related records.
    • When you enable this feature, the setting will apply to all forecast types, and each type will store its own adjustment data.
  • Scroll down the page to the Enable Cumulative Forecast Rollups section.
    • By enabling this option, your forecast display will show cumulative rollup columns, including opportunities in multiple categories.
    • If you don’t enable this option, your forecast displays will display separate rollup columns.
  • Finally, scroll down the Forecast Settings page to Configure the Default Forecast Display, where you can choose the appropriate Forecast Period.
    • In the section, you can choose the Forecast Period, when it should start, and how many periods you’d like to see in your forecasts. Here, you can also choose to Show quotas.
    • When you do, users will see the target amounts and attainment percentages for team members and territories.
  • Once done, click Save to finalize your settings.
  • Once you’ve set up your forecasts by following these steps, you should also add a Forecasts Tab so your users can access forecasts easily.
    • To do this, enter App Manager in the Quick Find box from Setup.
    • In the results, select App Manager, then Edit, and then Navigation Items.
    • Move Forecasts from the Available column to the Selected column, then save your changes.
  • Enter Profiles in the Quick Find box from Setup and select Profiles from the results.
    • Select the profile that needs access to the forecasts and click on Object Settings. Click on Forecasts and then Edit. Select Default On from the tab Settings dropdown list and save your changes once done.

 

Improving Salesforce Forecast Accuracy: Best Practices

Sales leaders typically tend to be accurate within 10% of their forecasts more than 50% of the time. If you’re constantly outside the 10% threshold mentioned earlier, something might be amiss. However, being within 5% of your forecast is rare (but it can happen).

When adjusting your forecasts, remember that several factors can affect the accuracy of projections, such as market conditions, changes in customer behavior, and unforeseen circumstances.

Luckily, there are a few best practices for Salesforce’s Collaborative Forecasts. Once you implement them, you’ll improve the accuracy of your insights.
 

Ensure Your Data Is Accurate and Up-to-Date

Ultimately, the accuracy and reliability of your forecasts rely on accurate opportunities, quotas, and historical data. As such, it’s worth taking the time and effort to implement measures that ensure data accuracy.
 
forecast in salesforce
 

Define the Right Forecast Hierarchy in Salesforce

Carefully consider the roles and levels within your business to determine who can view and edit forecasts at each level. Also, different departments or teams within your company might have different forecasting needs, so you’ll need to consider this when defining your hierarchy. For example, operations analysts will need to see different data than account executives.
 

Choose the Appropriate Forecast Type

As we’ve mentioned earlier, Collaborative Forecasts in Salesforce offer several forecast types, and it’s up to you to choose the suitable types for your business. To do this, you’ll evaluate which forecast types best suit your business’s needs. On a more granular level, you might also find that different types might be more suitable for different teams or departments.
 

Train Your Users

Finally, train your users so that they get the best from the platform. Consider creating training materials or hosting training sessions to help your team members understand how to create and edit forecasts, view forecast reports, and collaborate with others.
 

Predict Your Business’s Future (without a Crystal Ball)

Accurate predictions about your business’s future revenue can help you plan investments better, build more robust dashboards, optimize your product development processes, and stay on top of your expenses. Fortunately, you won’t need a crystal ball or dozens of analytics tools. Salesforce Collaborative Forecasts give you all these capabilities and more!

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