How to Forecast Royalties in Salesforce

Royalty forecasting is a complex but critical process, especially for businesses that rely on intellectual property (IP) licensing. In this guide, you can learn how a tech company leveraged revVana’s capabilities to simplify royalty forecasting in Salesforce.

The Challenge of Royalty Forecasting in Salesforce

Forecasting royalties in Salesforce can be challenging due to the complexity of product catalogs, variable terms, and the need to model revenue over time. For this example, let’s discuss a company that sells IP licenses with two key revenue components: a one-time license fee and an ongoing royalty fee. The royalty component kicks in when their customers design IP into products and begin selling them, making it particularly complex to model.

For instance, this company’s revenue comes from two distinct products: AI robots and smart door locks. The royalty structure for each product varies—one generates royalties as a percentage of the average selling price (ASP), while the other is based on a fixed dollar amount per unit sold.

Leveraging revVana for Accurate Royalty Forecasting

Using revVana within Salesforce, the company can easily model these royalty streams, despite their complexity. Here’s how they do it:

1. Product-Specific Royalty Structures
   Each product can have its own unique royalty structure in revVana. For example, the AI robots generate royalties based on 2.3% of the ASP, while smart door locks generate a flat $2 per unit sold. revVana allows the sales operations team to input these royalty rates and dollar amounts directly into Salesforce, making it easier to manage these varying terms.
2. Time-Specific Forecasting
   revVana enables forecasting royalties over specific time periods. For AI robots, the royalty revenue is spread over five years, with the forecasted total royalty revenue amounting to $1.5 billion. revVana supports flexible time slices, so royalties can be forecasted by quarter, year, or any other time frame that fits the business needs.
3. Real-Time Adjustments
   One of the standout features of revVana is the ability to make real-time adjustments to the forecast. If market conditions change or sales volumes need to be adjusted, the platform allows for quick updates to the forecast. For instance, the number of units expected to be sold in specific quarters can be adjusted, making the forecast more accurate and aligned with current market realities.
4. Multiple Measures for Enhanced Forecasting
   revVana also allows users to incorporate multiple measures when forecasting royalties. In this case, the team uses quantity, royalty rate, ASP, and royalty amount to calculate the total royalty revenue. However, the platform is flexible enough to include additional dimensions like cost, markup, and MSRP, providing a comprehensive view of the forecast.

See it in action:

The Benefits of Using revVana for Royalty Forecasting

1. Ease of Implementation: Setting up and managing royalty forecasts in revVana is straightforward, even for complex royalty structures.
2. Comprehensive Reporting: revVana offers robust reporting features that allow the company to generate detailed forecasts, which can then be shared with stakeholders through Salesforce reports or email.
3. Scalability: The platform integrates seamlessly with Salesforce’s other tools, including CRM Analytics and Tableau, providing a scalable solution for analyzing and visualizing royalty data.

Royalty forecasting doesn’t have to be a complicated process. With revVana, businesses can streamline their forecasting efforts in Salesforce, ensuring they have accurate, real-time data to inform decision-making.

Whether you’re dealing with simple or complex royalty structures, revVana’s flexible and customizable platform provides the tools you need to forecast royalties with precision. Interested in learning more? Contact us to learn more.