Sales Forecasting Accuracy: How to Put Your Data to Work
Sales data. Most companies have an abundance of it floating around—performance data, compensation data, financial data. Poorly-handled data creates a bit of a mess. When handled well, data can help ensure sales forecasting accuracy, but when handled exceptionally, data can drive alignment with sales and finance teams and even optimize your overall sales plan.
Before we dive into exceptional, let’s discuss how many companies handle their data right now. Typically, companies compile data continuously, tracking it down from various spreadsheets, and analyzing at the end of each quarter—often only to discover that due to unforeseen circumstances, sales forecasting is off, and the team is not on track to reach key goals.
There are three problems that accompany this all-too-common scenario:
- The finance team wastes excess hours on data retrieval and spreadsheet entry
- After the data is organized, 80% of the spreadsheets will have errors anyway (*Incorrect data means reps may be paid inaccurately, causing its own set of problems)
- In the end, many issues are only realized after they have already wreaked havoc
So what can companies do to ensure data and sales forecasting accuracy? Better yet, how can companies use data to ensure accuracy and proactively identify problems before they become catastrophic? Can your data really do that?
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Automating is the Secret to Forecasting Accuracy
In short, yes, your data can do that. Using automated sales performance management (SPM) and sales forecasting tools, organizations can have a central center for ALL sales performance data. In turn, this helps increase sales forecasting accuracy.
A recent CFO Alliance study concurs that ultimately, SPM solutions effectively solve the three common data-derived problems by helping companies:
- Reduce data entry and retrieval time up to 70%
- Ensure 99% data and compensation payment accuracy
- Identify potential problems earlier and implement corrective action
Next, we’ll discuss how SPM solutions aid in organizational alignment, effective sales planning, and of course, forecasting accuracy.
Supporting Everyone’s Goals
Mutual Success for Sales and Finance
The strongest companies have successfully aligned their sales and finance teams, and the right SPM tools can make bridging this gap much easier. Automated SPM technology gives both sales and finance leaders deeper visibility, accelerated time to information, and access to real-time data.
Furthermore, deeper visibility into performance and pipeline data gives both sales and finance more insight to identify the right prospects earlier. This creates a stronger sales pipeline, and gives everyone a better picture of what’s closing in a given quarter. When sales and finance are on the same page, everyone is better informed. SPM solutions feed data directly into finance systems, so information can be analyzed and shared exponentially faster than before.
In addition, access to real-time data allows finance leaders to quickly monitor and measure sales performance and proactively adjust forecasting and compensation plans, increasing business agility and decision-making timeliness. This makes sales forecasting accuracy easier to achieve and is ultimately a benefit to both teams.
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Fewer Surprises and Greater Goal Attainment
Finance needs accurate information to ensure sales forecasting accuracy. Overestimating or underestimating revenue goals or commission expenses can halt progress towards company goals. Fortunately, SPM solutions help leaders gather this data easily and paint a better picture of what’s to come.
Because compensation includes variable pay, you can’t be 100 percent sure how much you’ll need to plan for. Better visibility into the sales pipeline allows finance leaders to compare data to previous years and make a well-educated projection for the future.
As you go through the course of the year, you can access immediate insights into the cost of accruals, see what’s truly in queue in the pipeline, and determine if compensation payments are on target with goals. With fewer financial surprises, leaders can trust their forecast is accurate, improve decision-making, and reduce risks.
Getting Started with SPM
Ultimately, sales and finance leaders should be able to trust the numbers. With more confidence in data accuracy, companies can use their sales data to forecast accurately and strategically. Xactly helps organizations use their data more effectively to unleash the power of their sales force’s potential.
You’ve got your data—now you just need to harness its power and unleash it. Discover more ways SPM solutions can help each leader in your organization in our white paper Driving ROI: The Business Case for a Comprehensive Sales Performance Management (SPM) Solution.
Driving ROI: The Business Case for a Comprehensive Sales Performance Management (SPM) Solution
Hobson & Company, a research firm focused on ROI and Total Cost of Ownership (TCO) studies, worked with Xactly to explore these challenges. The white paper highlights examples of operational and business benefits that can be realized with Xactly's comprehensive sales performance management solution from Xactly across sales planning, execution and optimization.