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6 Strategies to Building an Accurate Sales & Revenue Forecast

Mar 11, 2021
8 min read
How to build a sales and revenue forecast you and your stakeholders can trust.

When it comes to hitting your sales numbers, you only have two options: do or don’t. And for executive leadership and board members, ‘don’t’ is not the right answer. 

As part of running a successful business, it's vital that every department in your organization operate in a planned, predictable way. The best way to do that is by guaranteeing an accurate and reliable sales forecast. This becomes a major tool when it comes to building your business plan because it creates the foundation your revenue success will be built upon. By accurately forecasting for your organization, you can plan your operations more effectively, benefiting not only you but your customers and your potential customers as well.

But how can you realistically achieve that? Easy!

In this guide, you’ll learn how to leverage AI-powered technology in order to: 

  • Call your sales numbers with confidence
  • Spot common pitfalls of traditional, manual forecasting
  • Enable end-to-end visibility and alignment
  • Take advantage of existing operational-based data
  • Create and manage an accurate forecast
  • Assemble strategies to enhance your sales and revenue projections

Call your number with confidence

For many, it’s that time again.....It’s time to forecast for next quarter. However, for serious sales and revenue leaders, this is no trivial task.

“You missed the number? Hey, no problem, you’ll get it next quarter!” said no CEO or board member ever!!!

Credibility in hitting the number is absolutely the most important thing for a sales leader. And these leaders that hit their number regularly, don’t have it easy. It is usually a grind with a mad scramble at the end of the quarter to hit plus or minus 5%.

It doesn’t have to be such a painful process. If you can trust what you see in the pipeline and that your pipeline is filling at the appropriate rate with qualified leads and opportunities that fit your ideal customer profile, you can have the confidence that you’ll hit your number.

Before we tell you what’s needed to have a forecast you can trust - let’s look at how many sales and revenue leaders create and manage a forecast today.

How "Not" to Forecast

If you’re like most executives in sales or sales operations, you are armed only with a few static reports from your CRM and a spreadsheet. You list and manage the opportunities by sales rep and by stage - then you spend a lot of time in conversations with your sales team. Eventually you contact them daily for status updates.

Conversations are great with the sales team - especially on strategy to close deals, but it’s such a waste of valuable time to have daily status calls between manager and sales reps on the same deals over and over. You still end up with minimal visibility and knowledge about deals. And this leaves very little time for selling, coaching, and strategising -- among other priorities.

When you print out the pipeline for the team - it shows 3x to 4x the number. Questions you should ask yourself:

  • Can I rely on that 3x to 4x pipeline number?
  • How do I find out how good that pipeline really is?
  • Can I rely on my weighted average number?
  • Is there an easier way to get visibility into deals?
  • What do I have to do to get this forecast to where I can trust it?

Additional side effects caused by your existing sales forecasting process

Because the current sales and revenue forecasting process is so consuming, you hardly have any time left for:

  1. Coaching and developing the sales team
  2. Real work to maximise conversions at every stage
  3. Ramping new sales reps
  4. Understanding the effects of your lead-gen efforts

And by not spending enough time on these four things, closing business and quota attainment suffers.

How to Create & Manage Your Forecast... So You Can Trust It

Automation for the Sales and Revenue Forecast

Forecasting Pipeline Homepage

Imagine if you had an expert coach that knew your sales process deeply and prompted you on a logical next step on a deal that was still active but you were starting to neglect? Or if all of your deals magically went to the appropriate stage and milestone and gave you an accurate forecast?

These are examples of what formalising your sales & revenue processes via automation can provide. Automation is valuable because it saves a ton of time, and it organises and applies discipline and rigor without the manual effort. With process, workflow, and pipeline hygiene automation, an entire sales team will have a lot more time for selling and more value-added activity. These efforts are normally manual, time consuming and error prone.

The Use of Artificial Intelligence

Xactly Forecasting Alerts

Automation alone is not valuable. When combined with sophisticated AI and machine learning technologies, it unlocks hidden valuable information and insights that are critical for accurate sales and revenue forecasting -- all in real-time.

For example, insights can alert you to whether you have enough pipeline to hit the number this quarter or next quarter, and it can tell you what to do about it, such as how much to increase Average Selling Price, or increase lead gen efforts or conversion rates.

Why Business Intelligence (BI) tools are not enough for effective sales forecasting

Business Intelligence tools are great where the data is more structured and manageable. Using BI for untamed data in the CRM is almost as bad as using the spreadsheet. BI tools in the sales department usually end up as great-looking static graphs displaying insufficient and inaccurate data regurgitated from the CRM. These tools lack the automation of a purpose-built sales forecasting application and the artificial intelligence necessary for pipeline hygiene, real-time time-stamped deal information to make timely data-informed decisions, and increase the sales & revenue forecast accuracy.

6 Tenets of an Accurate Sales Forecast

So, how do you apply automation and AI to your sales and revenue forecast?

The following are six strategies that, backed by automation and AI, will enhance your sales and revenue forecast and provide additional benefits to increase win rates and quota attainment.


First and foremost, a successful sales organisation must clearly define and effectively communicate the sales process to be followed by all team members. Create rules for when to advance or regress leads & opportunities and when & why to close them as a loss. From sales leaders to the reps, keep everyone on the same page about process rules. By ensuring discipline around when or why to move a deal and where it belongs in the pipeline, any sales organisation can keep things well organised and consistent.


Did you Know?

By understanding how a deal flows through the funnel, reps and managers can have accurate information on where deals get stuck and conversion rates. This is essential information to provide unbiased, data-driven coaching. And it’s not enough to only have a process, which many organisations do, but very often, it is informally written down in a slide deck, a printout pinned up on a cubicle wall and therefore adhered to loosely. There need to be reminders to the sales reps on the next step that follows the appropriate sales process. And each step must be accomplished within a prescribed time limit to ensure positive outcomes.

Automating these steps and applying AI and machine learning to guide the reps through every deal removes guess-work on the rep’s end and increases the likelihood of closing the deal successfully.


Xactly Dynamic Health Score

Ensuring information is accurate, up to date, and removing deals that don’t belong in the pipeline improve sales & revenue analytics immensely. Along with effective pipeline management, formalising the sales & revenue forecasting process is equally important. In fact, per CSO Insights, having a formal and structured forecasting process can increase the win rates by ~12.6%. Streamlining the forecasting process using purpose-built AIpowered forecasting software, in turn, ensures sales process compliance, increases timely engagement on critical deals from sales leadership, decreases intuition bias, and boosts rep performance.


Sales reps need to provide their point of view on deals. It is crucial to update the CRM with deal status immediately after meeting or communicating with prospects and customers. However, manual CRM updates only create an unnecessary burden on the reps and keep them from essential selling activities. But AI and automation can help with smart data capturing techniques to ensure that CRM updates are effortless and increase selling time for the reps.


Artificial intelligence can provide great insights, but false or lack of signals could distort prescribed insights for decisions. While CRM should be an excellent source for deal information, it is not always up-to-date.

In fact, per Gartner, ~53% of sales leaders believe their organisations do not have highquality data available to make timely decisions. Critical opportunity information also lies outside of the CRM. Quality signals such as emails from prospects and meetings from the sales teams’ calendars are helpful to determine opportunity quality. Hence it is crucial to instantly detect and capture this information via AI to derive meaningful and timely sales insights for any sales leader.


Xactly Forecasting Pipeline Flow

Once a sales organisation has nailed down the strategies 1 through 5 of the above strategies, managers and sales reps have sufficient and accurate data that amplifies their ability to get real insights. Thus by consistently analysing performance and customising coaching for each sales rep using real-time funnel & activity data, sales organisations can get the entire team to exceed sales targets.

Thus by consistently analysing performance and customising coaching for each sales rep using real-time funnel & activity data, sales organisations can get the entire team to exceed sales targets.


By applying automation and AI in this way, you can trust your sales forecast while developing and making your sales team better. No longer will you wonder about the quality of deals that make up 3x or 4x the pipeline coverage. External conversations that you or the prospects are having with the sales reps will make their way into the CRM for better analysis and decisions. Ramp time of sales reps will be quicker, providing faster times to quota attainment. You’ll also have more time along with data-driven analytics to better coach the team. And thank goodness - you can finally get rid of that cumbersome, error-prone spreadsheet!

To see how your organisation can take advantage of sales automation and artificial intelligence to give you a consistent sales process and increased sales & revenue forecast accuracy with Xactly Forecasting - request a demo today.

To see how your organisation can take advantage of sales automation and artificial intelligence to give you a consistent sales process and increased sales & revenue forecast accuracy with Xactly Forecasting - request a demo today.

  • Forecasting
Lucy Hudson Headshot
Lucy Hudson
Director, International Marketing

Lucy Hudson is a marketing leader with over 18 years’ experience managing and executing events and marketing strategies across EMEA and APAC, 10 of which have been in the SaaS-based marketing technology industry.