Most companies focus on monthly, quarterly, or annual forecasts.
2. Determine revenue for time period you’ve selected
Using CRM data, calculate total sales revenue for your chosen time period.
3. Note all assets and expenses that impacted sales during that period, along with amounts
These commonly include:
Accounts payable
Accounts receivable
Cash
Payroll and commissions
Cost of goods sold (COGS)
Fixed assets
Rent or office expenses
4. Calculate the percent of revenue for all assets and expenses noted above
Divide your line item amounts by the total sales revenue amount to get your percentage.
5. Estimate revenue growth for the upcoming time period
Using research and CRM data analysis, identify the percent increase (or decrease) your sales revenue is likely to see in the upcoming time period. Then calculate the total revenue by converting that percentage to a decimal (ex. 40% = .4), adding 1 (to account for 100% of the current revenue amount), and multiplying by the current time period’s sales revenue.
6. Determine asset and expense amounts based on revenue increase
Using the percentages you mapped in step 4, determine what the amount associated with each asset or expense will be in the upcoming time period. For example, if COGS accounted for 30% of your america phone number list revenue and the forecasted revenue is $100,000, your forecasted COGS for the upcoming time period will be $30,000.
Trending Articles
Productivity icons like email and chat on an illustration of a laptop with a blue background
3 Ways Generative AI Will Help Marketers Connect With Customers
3 min read
Illustrating of Einstein character surrounded by 3 Trailhead badges for AI skills
Learn AI Skills on Trailhead
6 min read
Real-world example of the percentage of sales method
Frank had a holiday hit selling disco ball planters online and he wants to know what his expenses and assets will look like if sales keep going up.
Frank takes a look at his annual financial statement and is happy to see that he made a total of $100,000 in sales last quarter. Then, he adds up all of his sales-related assets and expenses for a total of $25,000.