Here we see how to forecast sales, or “12-month rolling forecasts.” These are due every month, by the first day of the month.
Management looks at a staggered forecast report that shows how the forecasts have changed, from one month to the next for the entire year. And they can see how a department actually performs and compare this to the forecast numbers. And where we see we’re really off, we can adjust in the future so we can predict better. It’s important to be able to keep forecasts accurate. This way we can know what our cash flow is and make good decisions, for example, whether we need to hire another salesperson, or whether we need to raise or cut budgets.
We’re starting with a new salesperson in this video. Randy has been with the company for 2 months, and so his sales numbers and predictions will be a lot more volatile.
In Odoo, you’ll go to Sales … 12 Mo Rolling Forecasts. You can either use the default filter, with which you’ll only see your own forecasts, or search by salesperson for someone else. If you’re new, you may need to rely on others’ numbers to make an educated guess, particularly about the fluctuation in sales volume over the year.
In the video, for Randy, you’ll see that for each month Randy has forecast for both American Stone and Star Stone since he will be making sales for each company. Here you’ll see we made an educated guess. Randy we predicted would make $15,000 in sales as a new sales pro in November. As contractor sales kicked in, in December and January, we believe his sales would hold at $15,000. We predicted sales would start picking up starting in February.
In this example, we open the November report, and then for the next month, December, we duplicate the report so you don’t have to start completely over every month. Just update the start and end dates. The title will automatically update.
Since this is a 12-month rolling forecast, you should have complete the upcoming month, until the current month you are in, for next year. After you’ve built up sales for a year, you can have last year’s numbers to work off of. And after you complete the new month, you can delete the oldest month from a year ago, and keep only 12 line items, one for each month. Click to add a line, enter the new start date (first day of the month) and end date (final day of the month) on the row (first two columns), and DO NOT HIT TAB. Your screen will lock up and you’ll have to start over. You need to click to advance to the field where you’ll enter to update your forecast number.
Watching the video, you’ll see how Toby guesses the seasonal increases and decreases in sales.
Forecasting is not a sales goal. This is not a stretch goal, or what you want, this is the money that you think will come into the company. If we have a huge anomaly in the last December, say, where we had a $40,000 sale, you don’t need to match the record for the following year, simply because you want management to look favorably on your numbers. It’s more important to be accurate.
While your sales forecast is somewhat a guess, particularly for a new salesperson, it’s less so when you are working with customers and know with some level of certainty what will come in. Think about the jobs you’ve got in the pipeline, what the timelines are, and what the likelihood is of them going through.
You can and should change this any time there’s a change. Examples include you’ve earned or lost a big job, or a job got pushed back or up. You’ll enter anything that will affect your numbers. In the video, we see on Nick Benson’s 12-months forecast, that Toby updates the forecast from $110,000 to $115,000 because while there are only 4 days left, Nick’s current sales are close to the forecast, and he has a new job that’s come in that he believes will update the forecast. To make the change, you’ll click the arrow next to the right of the forecast figure, and in the pop-up, enter the updated amount in the Planned Amount field, then click the Update Forecast button. Automatically a note at the bottom of the page will register that you made the change.
Finally when you have all of your months done, you’ll come up with a yearly number.
So, now click Save, and then you’ll confirm.
You can also look at forecasts as a way to figure out what you want to make personally. You’ll look at the total sales you’ve forecast over the year, take the average margin, and then you can come up with what you’ll make. If this is a lower number than you want it to be, you can estimate more, but then you’ll need to work backward to figure out what you need to do to make those sales.
