8 Signs You’ve Outgrown Excel For Revenue Planning And Forecasting

Last updated on Monday, June 14, 2021

Having a well-thought-out revenue plan is crucial for companies across all industries. Revenue planning and forecasting help a company outline its growth strategy.  In addition, top-line revenue is often the driver of departmental budgets across the organization. And, they can help to plan ahead and allow companies to compensate for seasonal changes in revenue and other important factors.

Spreadsheets like Excel and Google Sheets are the most commonly leveraged tools in the revenue forecasting process.  While Spreadsheets can prove useful when first starting out, as you scale and streamline your planning process and increase collaboration, spreadsheets are not an ideal platform, since they are typically disconnected from Sales and Finance applications like Salesforce and ERP applications.

In this article, we will discuss the eight signs that show you have outgrown Excel as a forecasting tool, and discuss options you may want to consider.

Why is Revenue Planning and Forecasting Important?

Revenue planning involves converting your annual revenue goal into quarterly and monthly targets. You then have to decide on a strategic plan that will allow you to realistically achieve those targets. By looking at historical financial data and forward-looking metrics such as pipeline, you will be able to adjust your revenue plan as your business grows.

Revenue forecasting allows you to accurately forecast your revenue based on historic and forward-looking sales metrics. Based on your forecast, you can decide how you will allocate your revenue and determine when the best time would be to make business investments like marketing and additional staff.

In essence, revenue planning and forecasting can help you to make informed decisions and develop data-driven strategies that can propel your business to new heights.

Benefits of Revenue Planning and Forecasting

Here are some of the benefits of revenue planning and forecasting:

  • A detailed revenue forecast can be the key to drawing in investors. If your forecast is promising, it proves that your organization will be a lucrative venture for those investors.
  • A strong revenue plan can improve your ability to budget for your business expenses. As a result, you can scale extra expenses accordingly and measure your progress before the year has even begun.
  • Revenue forecasting can assist with decisions around staffing too. Using the forecast, you can determine whether you can hire new employees and you can establish how much you’re able to pay them.
  • Revenue planning and forecasting can help you to identify your busiest and slowest months, thereby helping you to plan ahead and keep operational productivity consistent throughout the year.
  • Revenue forecasting can give you invaluable insight into your customers’ wants and needs which will help you to better predict future customer behavior.

Where Excel Fits In

When a lot of companies start out and money is tight, Excel is usually the first option financial executives consider when it comes to revenue planning and forecasting. A financial professional would then be required to create a uniform forecasting model that can be applied to all departments.

Although not entirely impossible to accomplish, it was and continues to be a very time-consuming task – one that very few finance professionals have time to do on a consistent basis.

Creating an accurate revenue forecasting model in Excel would often require you to come up with a working model and then populate it as best you can with insights from other applications. You would then have to distribute it to various stakeholders within your organization for strategic input.

After consolidating all of the input you have received back into the core model, you have to make sure that the other stakeholders haven’t actually changed any of your formulas, broken links to other tables, or added and deleted any rows in your Excel sheet, as this will break your model.

All in all, financial Excel models, specifically when it comes to forecasting, are not that easy to pin down for multiple departments within a company, especially if your company is growing at an exponential rate.

8 Signs You Have Outgrown Excel

1. Forecasting and Planning Takes up Most of Your Time

If planning or forecasting your company’s revenue on Excel or Google Sheets takes up loads of your time, then it’s probably not the most time-efficient platform to streamline these activities. When managing plans and budgets take up most of your time, then you are not investing in the support you need to manage your time efficiently.

2. Not Everyone Understands the Forecasting Model in Your Spreadsheets

If you have a complex Excel forecasting model that only one financial executive fully understands, you may run into some problems if that individual decides to leave the company. By investing in a forecasting solution that is easy to update and manage, you will allow the entire company to profit from it.

3. You Often Run Into Spreadsheet Errors

With revenue forecasting, accuracy is key. However, when using a spreadsheet to calculate complicated equations, the chances for error are significant. In turn, these errors could reduce the accuracy of your company’s forecasted revenue. This leads to decision-making based on incorrect information, which could end up costing you money.

4. You Have To Tiptoe Around Sensitive Data

Forecasting models often include sensitive data which means it might be difficult to send your Excel spreadsheet to departments that need it. Preventing one department from seeing sensitive information of another department, or preventing that information from falling into unauthorized hands can be tricky when using Excel.

5. You Find It Difficult Keeping Everyone In The Loop

Chances are that your revenue forecasting model has seen multiple revisions throughout the years. When using Excel, it can be hard to get everyone on the same page every time you have to update your financial model. This means that certain departments may be basing decisions on wrong information that is aligned with your business goals.

6. You Are Constantly Asked For An Updated Revenue Model

Since you have to send out your Excel revenue model spreadsheet via email, you are probably getting asked for the latest version of the spreadsheet all the time. Department heads often don’t trust that they have the right data which means you end up being the go-to person for all their queries. The data you use to build the forecasting, like pipeline data, is stale by the time your new consolidated forecast is created.

7. There Is Always A Delay With Data

Using Excel means combining account run rate plans, pipeline, and actuals every month, sometimes cutting and pasting the data into your spreadsheet. This process can be ripe for errors and delay departmental and corporate decisions as the team waits for updated data.

8. You Don’t Have Time To Analyze Data

The whole point of creating a revenue forecasting spreadsheet is to use sales data to make informed decisions and plan ahead. However, if using Excel leaves you with no time to get around to analyzing the data, then using it defeats the entire purpose.

Why revVana Is A Better Option

At revVana, we understand how frustrating spreadsheets can be which is why we have created revenue forecasting software that addresses many of the problems above.

Our platform automates forecasts from your pipeline, account-level plans, and virtually any other source. By having people use revVana directly within its Salesforce Sales Cloud environment, the platform eliminates sensitive revenue information getting mistakenly shared via email.

The best part about revVana is that you can still use spreadsheets if you want to. Simply export the finished reports and send them to the respective departments that need them.

If you want to take your revenue planning and forecasting to the next level,  then contact revVana today!

Free whitepaper: how to level up forecasting with Salesforce instead of spreadsheets