Understanding the Sales Planning and Forecasting Relationship

sales planning and forecasting
Karrie Lucero
Karrie Lucero
In Forecasting, Sales Planning
Karrie Lucero is a Content Marketing Manager at Xactly. She earned marketing and journalism degrees from New Mexico State University and has experience in SEO, social media and inbound marketing.

No organization exists without facing challenges. From increasing sales to enhancing productivity, these obstacles inadvertently affect an organization’s overall performance and bottom line. To stay competitive, it is important for companies to plan ahead and understand what changes, if necessary, need to occur in order to remain profitable.

The Forecasting and Sales Planning Relationship

Forecasting is necessary to estimate the likely financial outcome of the upcoming year. Sales leadership, alongside sales operations and finance use forecasting for all aspects of sales planning, including building sales compensation plans, territory planning, and overall sales strategy.

Watch the webinar, "The Risk and Reward of ASC 606," to discover the impact of ASC 606 to incentive planning and how the tactical need for better data can give companies a strategic advantage.

For finance, forecasting helps estimate future sales revenue and the associated sales compensation payments. However, a forecast is only as good as the data used to create it. Without the right data, sales organizations may either over or understate their true performance, which, in the latter scenario, can lead to a financial nightmare.

Before setting your budget it is important to understand all of the possible outcomes of your sales plans by expressing your forecast in various “what-if” scenarios that describe the worst, best and most likely outcomes, and develop contingency plans and assign a budget to each scenario.

How Automation Software Can Help

Accurate forecasting requires a close relationship between sales and finance. Both departments need data to accurately forecast, but it is important to use the right data. Start by looking at your company’s key drivers to understand the metrics that truly measure growth. You should also look for performance indicators that will give you insights to problems and successes early on, so you can adjust planning and forecasts as needed.

An easy way to compile this information is through automated software. Software, like Xactly Commission Expense Accounting, powered by Obero, can help you manage commission expense accounting needs to stay ASC 606 GAAP compliant and also act as a data archive for you to compare previous years’ data to help forecast future outcomes. Using automated software will help simplify data analysis and make the forecasting and sales planning processes more efficient.

Ready to equip your sales and finance teams with commission expense accounting integration? Schedule your personalized Xactly demo today!


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Understanding the Sales Planning and Forecasting Relationship