What is forecasting?
Let’s consider our day to day life. We try to predict weather, traffic, and lot more. We forecast how will be weather today, tomorrow or during this month so as to plan accordingly.
Similarly, in Salesforce when we talk about forecast, it means making an estimation of the future. We gather all the information from different sources we can and collaborate it together to do the forecast. So, this is called collaborative forecasting.
Previously, we had a customizable forecasting but then salesforce come up with a much better concept of collaborative forecasting. Customizable forecasting worked with Territory Management 1.0. Collaborative forecasting works with Enterprise Territory Management.
In Simple words, a forecast estimates how much your company plans to sell within a certain time period. We can do opportunity forecasting based on two types.
- Opportunity Quantity – In a month/quarter/financial year how many opportunities company has targeted to close and how much they have actually closed.
- Opportunity Amount– How much amount is targeted and how much amount is actually brought after selling.
An accurate sales forecast will help company understand what’s working and what isn’t.
Forecast Category and Opportunity Stage relationship
There are several opportunity stages but at high level it is close (lost and won) and open. At open stage there are many stages.
Probability – It increased based on stage. Open opportunity can be of any of stage like prospecting or qualification. But the more we progress the more probability increases i.e. customer interest in the product increases with each stage.
Forecast Category– There are Pipeline, Best Case, Closed, Omitted.
- Pipeline- Pipeline means the customer is in the early stages of the buying process.
- Best Case- Best Case means there is work to do to advance these opportunities.
- Commit – The Close Plan is going well on these opportunities
- Closed – Closed opportunities are won. No further sales effort is required to clinch the deal or be sure of the sales revenue.
- Omitted- Opportunities are set to Omitted when they are Lost or qualified out
Modifying Standard Forecast Categories
We can edit the category and probability for each stage based on business use case
Forecast Category is not about one opportunity but all the opportunities which are in that time frame i.e. It will bring all the opportunities for that time interval.
Let’s understand with help of example:
What is opportunity amount under pipeline?
It is opp1 + opp2 + opp4 = 30000
What is opportunity amount under Best Case?
It is opp3 + opp3 = 20000
What is opportunity amount under Commit?
It is opp5 + opp6 = 20000
What is opportunity amount under Closed?
It is opp7 + opp 8= 20000
Now if you observe, the above image. Opp 4 is in pipeline as well as in best case in same quarters. So in this case, if we don’t use forecast category then we won’t be able to segregate and it will be like duplicate record.
Forecast category helps to understand if stage is changed still opportunity will be tracked even if it is under same quarter.
Enable Forecasts
From Setup, enter Forecasts Settings in the Quick Find box and select Forecasts Settings.
Add a Forecasts Tab
In the Quick Find box->enter App Manager ->Select App Manager-> click the Edit quick action for your Lightning app->Move Forecasts from the Available column to the Selected column, and then save your changes.
From the Tab Settings dropdown list, select Default On, and then save your changes.
Forecast Types
Go to setup-> search for Forecast types in quick find- > Create Forecast Type
Forecast based on which object:
- Opportunity- Based on Amount / Quantity
- Opportunity Product – It is used for product family grouping.
E.g. – Electronics/accessories categorized as per business.
- Opportunity Split
Let’s understand Opportunity Split in little detail:
Multiple people can be working on a single opportunity who are internal users (eg salesperson) this is called opportunity Team. Now dividing opportunity amount among different people working on the opportunity is opportunity split. It is splitting the percentage.
For now, we will select opportunity object and click next
Forecasting is done by either amount or quantity
Below image depicts that forecast will run based on closed date of opportunity i.e. all the calculation will be based on this date. It can be other field as well.
User Role – Role hierarchy
Territory – When territory is enabled use territory.
Give name to Forecast Type
Once you create Forecast type, it will appear in the list like below image.
Forecast Settings
Let’s say there are some opportunities which have not been captured in CRM then that value won’t come here. Suppose there is campaign held and deal got cracked there itself and could not get captured in CRM. Now suppose -$800 amount is cracked so if manager has that checkbox enabled then manager is able to adjust amount manually.
Basically, to adjust values later by manager we select ‘Enable Manager Adjustment’
To adjust values later by owner of the opportunity we select ‘Enable Owner Adjustment’
How we will know that which opportunity is manipulated, and which is not?
If record is manipulated, then it will be highlighted in different color.
Forecast Rollup
Now this topic becomes little confusing so let’s understand in detail.
You can choose between two ways of showing how opportunities roll up into forecasts:
Single forecast category: The opportunities from each forecast category into separate forecasts for each category.
Example: Single Opportunity can move to different stages in same quarter and based on that category will also change. Example: Opportunity moved from Pipeline to Commit Category in same quarter.
Individual forecast category will show Current opportunity only which is in current category it belongs to i.e. will only show opportunity in commit stage.
Image Taken from : Define Forecast Rollups and Default Date Ranges
Let’s understand this image to get further clarity. In Single Category Rollup we just add up opportunity amount of category i.e.
Closed = $50 because opportunity amount is $50 in closed category.
Commit = $50 + $50 $50 = $150
Similar thing goes for other categories. It will show separate forecast for each category.
Cumulative forecast: Opportunities from multiple forecast categories into cumulative forecasts.
Example: In a quarter single opportunity is moved to multiple stage and therefore gone to multiple categories i.e. pipeline to commit. Cumulative forecast will show for both the opportunity.
Image Taken from : Define Forecast Rollups and Default Date Ranges
Let’s focus on below image
- Closed Forecast will show closed opportunity only i.e. $50.
- Commit Forecast = Commit + Closed i.e. Commit: $50 + $50 + $50 = $150
Commit + Closed: $50 + $150 = 200 (You can see how it added commit + closed to show cumulative forecast)
- Best Case Forecast: Best Case + Commit + Closed i.e. 100+ 150 + 50 = $300
- Pipeline Forecast: Pipeline + Best Case + Commit i.e. 200 + 100 + 150 = $450
I hope now forecast rollup is clear to you.
Set a Default Forecast Date Range
The forecasts page shows forecasts for individual months or quarters and a range of months or quarters, depending on the settings you choose.
Enable Forecast Users
We can enable forecast users on the All Users page or the Forecasts Hierarchy page. When you enable users, they’re added to your forecasts hierarchy.
Setup->Enter Users-> Select Allow Forecasting
Forecast Hierarchy
You can add users in the forecast hierarchy
Forecast Quotas
A quota is a monthly or quarterly sales goal that’s assigned to a user or territory. A manager’s quota equals the sales that the manager and team are expected to generate together.
Output
When I view my forecast tab, forecast data is automatically populated with my related opportunities:
Interview Question
What are types of forecast category?
- Omitted
- Pipeline
- Best Case
- Commit
- Closed
What are different type of Opportunity forecast?
Forecasts can be based on:
- Opportunities
- Opportunity Splits
- Product Families
- Territories
With the opportunity what are type of forecast used?
- Quantity
- Amount
What is the advantages of Cumulative Forecast Rollups?
With single category rollups, each total and subtotal represents opportunities from only one of the forecast categories.
With cumulative rollups, the forecast columns show cumulative amounts from the opportunities in the named forecast category and subsequent categories in sales pipeline. This view makes it easy for sales team members to see the total numbers that they’re likely to bring in without combining the category totals themselves.
What are quotas?
Quotas are used to set target sales goals for forecast users. This can allow organizations to establish greater accountability for meeting sales expectations.
