How are you forecasting revenue with a constantly shifting pipeline right now?
This has become a sensitive question, but it’s a critical one to ask any business that’s trying to adapt to the current situation we’re all in with the COVID-19 crisis …
Most of the companies we talk to that operate with revenue coming in over time through subscriptions or bookings are telling us two things:
- Their sales team is moving existing pipeline in unnatural ways to drive revenue right now.
- Their finance team can’t reforecast revenue fast enough to match these changes.
It’s the second one that people are most concerned about, because that data drives critical activity within the company. The revenue forecast affects budgets, hiring decisions, cash flow, and valuation, just to name a few.
Rapid recasting of revenue forecasts is more important than ever as opportunities move around in an unpredictable economy.
But given that revenue forecasting is done through complex, time-consuming spreadsheet processes, how can you keep things moving quickly between Sales and Finance?
Based on conversations with organizations struggling to accelerate the speed of revenue forecasting and reforecasting, I want to share three reality checks that have changed everything for some businesses right now — and might change everything for yours.
Your Complex Revenue Forecasting Process Isn’t As Unique As You Might Think
A typical company may go through the revenue reforecasting process only twice a month — even when their pipeline is constantly changing, and even when revenue forecasting speed is a life-or-death activity for the business, like it is right now.
This isn’t because of stubborn “we’ve always done it this way” attitudes. It’s because the process takes half a month to do.
If your revenue forecasting process takes weeks and involves 45 spreadsheets with thousands of rows of data and complex formulas — and it’s not even based on a complete set of data! — you’re not alone. And your process, believe it or not, is not unique.
So, you’re downloading data from Salesforce twice a month for these cumbersome reforecasting processes, and by the time the recast is done, the data is stale.
For this alone, there’s a huge benefit in having software do the revenue forecasting for you. Imagine having a tool that automatically recasts that forecast on a continual basis. Imagine being able to look at a timely and updated revenue forecast every day, at any time. Your organization will grow decision-making superpowers.
Your Sales Team Isn’t the Only One Using Salesforce Data
Finance teams sometimes tell us that they don’t use Salesforce data for revenue forecasting — but when we press a little, we usually find that’s not the case. They do use that data, they just pull it out of Salesforce and into giant spreadsheets.
Your sales team might not see the value in keeping pipeline data up
to date in Salesforce, but actually, this activity is directly linked to how their commissions and bonuses are going to be calculated.
Being more open about how Salesforce data is being used gives the sales team imperative to keep it up to date. We’ve actually seen this facilitate communication between Sales and Finance and start to break down that silo.
You Can Accelerate Your Revenue Forecasting Process NOW
This is the biggest myth I want to bust, that moving away from painful spreadsheet processes is an even more painful process.
Moving to an automated, rapid revenue forecasting process does not take a lot of time.
It does NOT require moving giant spreadsheets into a new software tool.
It does NOT require IT intervention.
And it does NOT require your sales team to change their processes.
You can do this with a pipeline revenue forecasting tool that’s built right into Salesforce and can pull the data into the location of your choosing (spreadsheet, FP&A tool, ERP, you name it).
You can quickly configure it with your own logic rules to create more accurate revenue forecasts, recast as often as you need to, and you don’t need to be an expert in statistics to do it.