At the highest level, there are three main metrics in a sales forecasting system: (1) total pipeline, (2) expected sales in the period (usually calculated as the sum of all pipeline deals, weighted by close probability), and (3) business closed so far. For reasons that I think this audience understands, all three are critical to track, each for different reasons. Even more valuable is comparing where you are in the current quarter to where you were at the same point in the last two or three quarters.
While the information in a sales forecasting system captures critical information, virtually everything in the system is just a guess: the size of each deal, when it might close, how likely it is to close, etc. For that reason, the main value of a forecasting system is not to predict future results with scientific precision, but to help impose a uniform discipline on the sales process and to give management a sense of overall trends. This makes a sales forecasting system an ideal candidate for presenting its key information in charts, rather than tables. Heres an example, recapping the weekly progress of the above three metrics for each quarter, through week 35 of the year:
Heres how to read this chart, which I call the tropical fish chart because of the visual impression I get from it:
I like this chart because it provides an at-a-glance perspective on how sales are progressing through the quarter, and whether things are on track for achieving target results. Here are a few observations you could make from the sample chart shown above:
As Ive said here and in previous posts, sales forecasting systems are not a good place to look for truth in the sense that we usually think of that word with respect to numbers. The main purpose of these systems is, after all, to predict the future, and thats always messy. But summarizing the information from the sales forecasting system in a coherent, consistent way is a powerful management tool for understanding how well the sales organization is functioning.