The NetSuite forecasting feature is simple to use and available with little setup required. As sales reps create opportunities and close deals, NetSuite automatically includes these amounts in our sales forecast.
The Calculated Forecast
NetSuite calculates our sales forecast as the sum of the following:
- Opportunities with no estimates attached or with estimates that are not set to be included in the forecast
- Estimates set to be included in the forecast that have not been converted to closed sales
- Unbilled sales orders that have not been converted to cash sales or invoices
- Cash sales and invoices within the time period we are forecasting
If we use weighted forecasting, the calculated amount for each opportunity or estimate is multiplied by the probability of close. For example, an opportunity with a total of $1000 and a 40% probability of close would have a weighted forecast amount of $400.
Forecasting Updates and Overrides
No one has a better feel for their sales forecast than the sales rep. If the calculated forecast does not match what a sales rep anticipates for their sales numbers, they can override the forecast with the Forecast Editor.
When a rep saves their forecast, NetSuite creates a snapshot of the rep’s best prediction of their sales at that point in time. To ensure that the company-wide forecast is accurate, reps should review and update their forecasts on a regular basis.
Sales managers can use the Manager Forecast Editor to enter override forecasts that roll up into reports viewed by successive levels of our organization. The Manager Forecast Editor uses the judgment and experience of sales managers to know how accurately individual reps report their sales and pipeline.
Sales reps cannot see manager overrides to their forecasts. Sales reps continue to work for the best deal they can close regardless of what the manager thinks is a more likely outcome.
Three-tiered Probability System
When sales reps create opportunities and estimates, they place each record into one of three categories: worst case, most likely, and upside. These categories, which we can rename as required, indicate how likely it is that a deal will close. Use worst case for deals that are likely to close. Use upside for deals that are not likely to close. Use most likely for deals that are somewhere in between the other two categories.
This three-tiered probability system gives the sales rep initial control over how an opportunity is reflected in the forecast. This initial control provides a level of accuracy the moment the sales rep enters the opportunity.
Forecast KPIs and Snapshots
With NetSuite, we can view real-time forecast Key Performance Indicators (KPIs) and Snapshots on our dashboard. This includes closed sales and recurring revenue as well as the opportunities and quotes in our pipeline.
We can show a variety of forecast key indicators and snapshots that provide an accurate view of our forecast numbers.
We can view any of the following forecast snapshots on our dashboard:
Snapshot Description
- Total Open Estimates Shows the estimates (quotes) that are open as of the date you select.
- Total Open Opportunities Shows the opportunities that are open as of the date you select.
- Forecast by Status Shows a forecast divided by customer status, which provides a sense of where potential sales are in the sales cycle.
- Sales Reps by Forecast Shows the top sales reps by forecast for the date range you choose.
When we are logged in as a sales manager, forecast and quota key indicators show the forecast and quota amounts for our team. Sales reps see their personal forecast and quota amounts.
We can also include Historical Metrics in our forecast snapshots and reports.
To add key performance indicators and snapshots, go to Home > Customize this Page.
Sales Management Snapshots
We can add sales management report snapshots as dashboard portlets. These snapshots provide real-time sales, forecasts, and order totals, visible by the sales team.
The following portlets are available:
- Portlet Description
- Sales Managers by Forecast Shows the sales forecast for each sales team.
- Sales Managers by Sales Orders Shows the approved sales order totals for each sales team.
- Sales Managers by Sales Shows the sales totals for each sales team.
To show sales management snapshots:
- On our Home tab, click Personalize Dashboard.
- In the Add Content frame, click on Report Snapshots.
- Click Sales Management.
- Drag the portlets we want to show onto our dashboard.
Click the icon next to a manager to expand or collapse the sales team. Click a currency amount or the View Report link to open a report relevant to the snapshot. For example, when we click a forecast amount for a sales rep, the Sales by Sales Rep Detail report opens.
Forecast Reporting
NetSuite provides extensive Forecast Reports to enable us to manage and report our forecasting data. NetSuite provides the following types of forecasting reports:
- Accuracy Reports – Forecast Accuracy reports provide another layer of checks and balances that we can use to sharpen our forecast based on past performance.
- Summary Reports – Summary reports such as the Sales Forecast vs. Quota Report bring together all of our forecast data.
- Detail Reports – Detail reports provide a granular look at our report data. For example, the Forecast by Sales Rep Summary Report lists each sales rep’s forecast for the period we define.