The Importance of Sales Forecasting


A sales forecast is a month-by-month forecast of the sales volume and revenue you expect to achieve. It’s an essential tool for planning. It helps you understand how to get closer to reaching your sales target each month. You can then adjust marketing and sales activities effectively to meet sales forecast.


A volume forecast is the key input for the operational and cost plan. If it’s inaccurate, you might not produce enough products and might lose out on the opportunity to sell more. You might be saddled with excess inventory.


A revenue forecast is an essential tool that allows you to estimate your expenses and profit respectively. It provides input into the cash flow projections and investment plan.