A forecast is a prediction of the expected sales revenue of all the deals involved in a defined time frame. They are important for sales managers and, more generally, for the company's business people because they allow proper sales strategy planning.
Opportunities are the core source of data for forecasts because their amounts and quantities roll up over time, depending on their stages and other key data (such as close date, owner, products, and territory). Do you remember the Probability and Forecast Category fields on the Opportunity object? They are used in forecasts to segment and group opportunity data (no surprise that a 10% probability opportunity has a smaller impact on forecasts than a 90% probability one).
Change forecast categories values from Setup | Object Manager | Opportunity | Fields & Relations | Forecast Category to align them to the company's sales strategy.
To better understand what forecasts are, let's have a look at the following diagram:
This diagram shows a company's hierarchy:
- Jean-Michel is the SVP of Sales
- Alexandra is the VP of International Sales
- Atul is the VP of North America Sales
- Jeff, Sonia, and Sonica are sales reps of the International Sales division
- Simon and Federica are sales reps of the North America Sales division
The following diagram shows an excerpt from the company's role hierarchy:
Forecasts allow each manager to have a look at all their sales opportunities and have roll-up values of all involved revenues.
The Salesforce platform delivers two kinds of forecasting:
- Customizable forecasting
- Collaborative forecasting
For the differences between collaborative and customizable forecasts, refer to https://help.salesforce.com/articleView?id=faq_forecasts3_whats_difference_between_versions.htm&type=5.
In this section, we'll dig into collaborative forecasting.