How to Build Forecasts in Salesforce For A Predictable Future?

Sales deployment, financial planning, budgeting, marketing planning, and operations are all fundamental aspects of any business. To make all these aspects run smoothly in a proactive manner, you need to consistently foresee and properly prepare your organization.  Sales forecasting is a very useful tool for predicting the performance of your business. It is also essential in budgeting and setting expectations and targets for different departmental heads.  The impact of a sales forecast is massive in any organization. And therefore, for effective results, the forecast information must be as accurate as possible.  In this article, we will look at a step-by-step guide on how to build Forecasts in Salesforce and manage effective sales forecasts that will give your organization a competitive edge in the industry. Let’s get into it.

What is forecast in Salesforce?

In Salesforce, we use deploy forecast as an expression of expected sales revenue. These expressions are used by sales teams and sales leaders to predict and plan their sales cycle from pipeline sales to closed sales, and most importantly to manage expectations in the entire organization. It is basically based on the gross roll-up of a set of opportunities.  Before we look at how to build Forecasts in Salesforce, let’s see the two versions of forecasts in salesforce.
    • Customizable Forecasting
    • Collaborative Forecasting 

What is customizable Forecasting in Salesforce?

Customizable Forecasting in Salesforce is a flexible and accurate tool that helps an organization to precisely predict the amount of revenue it will generate from sales. Additionally, it enables you to have a picture of the number of products or services you are likely to sell. This wide tool allows you to predict sales over a selected different range of dates as you desire. Customizable Forecasting is one of the Salesforce forecasting modules that allows you to deploy revenue and quantity to predict sales. A flexible solution that has been affirmed to be decisive for organizations with advanced requirements. When setting up this feature, you need to enable Customizable Forecasting and define settings plus individual features. After this tab is allowed, users in your organization can then view and submit customizable forecasts based on the settings you put in.  However, with the customizable Forecasting version no longer available since July 2020, Salesforce recommends an alternative and updated version, Collaborative Forecasting.

Collaborative Forecasting

This is the updated version of customizable Forecasting which has wider and more advanced features in it. This version has more improvements to be made in future updates. If you are just getting started with Salesforce forecasting, I would recommend you consider a collaborative rather than a customizable version.

How to build Forecasts in Salesforce?

Below is a step-by-step procedure on how to set up Collaborative Forecasting in Salesforce

Enable Forecast Users

    • From Setup, click Manage Users → Users.
    • For each user, you want to enable, click Edit.
    • Under General Information, select Allow Forecasting.
    • Click Save.

      Define Your Role Hierarchy

    • Define your forecast hierarchy; forecast hierarchy is based on the role hierarchy, but specifies which users are forecast managers.
    • From setup, click Customize → Forecasts → Forecast Hierarchy. Click Expand All to see the roles in your organization.
    • Click Enable Users and click Add and Remove to move users between the Available Users list and the Enabled Users list. If you previously enabled a user from Setup by clicking Manage Users → Users and editing a user page to allow forecasting, the name already appears in the Enabled Users list.
    • If you need to define a forecast manager for each manager role in the hierarchy, click Edit Manager next to the role, and select a manager name from the Forecast Manager drop-down list.
    • Click Save.

      Choose One Or More Forecast Types

    • From Setup, click Customize → Forecasts → Settings.
    • If your organization:
      • Doesn’t yet have any forecast types enabled, click Add a Forecast Type.
      • Already has forecast type enabled, click Add another forecast type.
    • From the Forecast Type menu, choose the data source you want to use for the forecast.
    • Choose the Forecast Measurement you want to use. There are two choices: Revenue or Quantity. If you want to use both, add separate forecast types for each one.
    • Choose the fields you want to display in the related opportunities list on the Forecast tab for the forecast type.
    • If your forecast data source is opportunities or product families, the Amount field appears by default. If your data source is opportunity splits, the Forecasted Amount and Split % fields appear by default. You can change the selected fields for each forecast type even after it has been enabled. Depending on whether your forecast type users the revenue or quantity measurement, consider adding the Amount or Quantity to the pane.
    • Click OK and then Save.
    • Select the fields that appear in the opportunity pane for each forecast type.

      Enable Quotas

    • From Setup, click Customize → Forecasts → Settings.
    • Under Quotas, select Show Quotas.
    • Click Save.

      Enable Forecasts Adjustments for Your Organization and for Specific User Profiles to Make This Functionality Available in Your Organization.

    • From Setup, click Customize → Forecasts → Settings.
    • If you want to allow forecast managers to adjust their subordinates’ forecast amounts, under Enable Forecast Adjustments, select Enable Manager Adjustments.
    • If you want to allow all forecast users to adjust their forecast amounts, under Enable Forecast Adjustments, select Enable Owner Adjustments
    • Click Save.
    • From Setup, click Manage Users → Profiles.
    • Find a profile for which you want adjustments enabled.
    • If you’re using the enhanced profile user interface, click App Permissions and click Edit. Select Override Forecasts and click Save.
    • If your organization has more than one type of forecast enabled, each forecast type maintains its separate adjustments.

Choose whether to use individual forecast category rollups or enable cumulative forecast rollups.

As an administrator, you can choose between two methods of rolling up opportunities into forecasts:
          • Individual forecast category rollup – it combines the opportunities from individual forecast categories into separate forecast amounts for each category.
          • Cumulative forecast rollup – it combines opportunities from more forecast categories into cumulative forecast amounts.
          • Define forecast range. The Collaborative Forecasts rollup table displays forecast amounts for individual months or quarters and a range of months or quarters, depending on your organization’s Collaborative Forecasts settings. The default setting is six months or four quarters. 
The forecast date range for the organization becomes the default for all Collaborative Forecasts users. Users can use this default or they can set a different date range display for their forecasts.  When users change their forecast date range displays, administrators can’t override them. However, when changing the period display from monthly to quarterly or quarterly to monthly, the change is reflected in all users’ forecasts.
          • From Setup, click Customize → Forecasts → Settings.
          • Under Configure the Default Forecast Display, use the drop-down lists to select a beginning period and the number of periods you want to display. Click Save.

            Customize your forecast categories if your organization uses specific terminology.

             A forecast category is a category within the sales cycle that an opportunity is assigned to based on its opportunity stage.  The standard forecast categories are Pipeline, Best Case, Commit, Omitted, and Closed. You can customize forecast category names for your organization.
                    • From Setup, click Customize → Opportunities → Fields.
                    • Click Forecast Category.
                    • Click Edit for any value you want to edit in the Forecasts Category Picklist Values.
                    • Enter a forecast category name. Click Save.
                    • Set a forecast currency if your organization uses multiple currencies. You can select either your organization’s corporate currency or the forecast owner’s currency.

                  Make sure the Forecasts tab is visible to forecasting users.

                  You can set Quotas for each user. When you use Collaborative forecasting, you can set quotas only by API. However, there is a possibility to use the “Edit Quotas” AppExchange application, where you can set quota for opportunity quantity or opportunity revenue:

                  Need Some Help Setting Up Forecasting?

                  Now that you have a pretty good idea of how to build Forecasts in Salesforce, I believe you can go ahead and create one of the most effective sales forecasting systems that will take your organization to a new level.  Having trouble with setting up forecasts? We can help you with that. We help businesses maximize on their Salesforce subscription. We offer premium Salesforce managed services to help you attain your digital transformation goals. Get in touch and let us grow your business together!