What are Forecasts?

Forecasts are a prediction of future revenue, essentially estimating how much of a product or service will be sold in a specific time period(like a week, month, quarter, or year). It helps businesses plan for the future by projecting how sales efforts will perform.

Forecasts are built automatically when you accept an estimate. You get to set the forecast at that time, but of course, that doesn’t mean that it will stay that way. E.g. your client puts the job on hold for a month, you don’t complete a phase for a job as quickly as expected and you can’t progress bill as soon as you had originally forecast.

How do you keep your forecasts real?

Review your forecast every week and at the end of the month when you have completed invoicing for the month. Look at the numbers in current and future periods. Is your forecast looking real?
Look at what you have billed this month and compare it to what is in your forecast. Have you billed more than you forecast? Tip: Use the selection “Underperforming in the current period” to quickly identify the jobs where the forecast is higher than the actual billings. Where the forecast is higher, you either have an opportunity to bill more this month, or you need to adjust your forecast to meet the changing expectations on the job. You need to move the billings to next month or beyond, wherever it is going to be billed.
Use “Over-performing in the current month” to identify where you have billed more than what you forecast.
Tip: you may ask “why is this bad”? It’s bad if you were not intending to bill the job until a later month but you were able to bring it forward. True, that’s not bad in itself, but what will be bad is when you look at next month’s forecast and you haven’t billed what was expected next month. That will lead to all sorts of time spent trying to reconcile what was billed when, and why the forecast is out. The simple fact is that you don’t have time to go back and try to work out the past, it should have been done last month, and each month. You should only be concentrating on the present and the future, and it should be telling you the truth about what is going to be billed.

Client Forecasts

There are specific job types you can raise that relate to client forecasts. Typically these jobs refer to annual budgets where there is no specified job. As specific opportunities are identified, they are raised as jobs and estimates created on those jobs. Those estimates then appear in the Sales Pipeline.

Sales Pipeline

The sales pipeline displays and manages the estimates that have not been accepted by clients, and allows you to forecast when the estimate will be accepted and the billing forecast when accepted. Note: For the estimate to appear in the sales pipeline the estimate’s rating must be less than 100%.

Billings Forecast

Each job has its own billings forecast that is generated automatically when you mark an estimate as accepted by a client (the estimate now has a rating of 100%). The amounts on the estimate are added to the forecast on the job. Jobs without an estimate can still have amounts entered into the Billings Forecast.

The essential ingredient is the Job’s Estimate / Quote and the Job Type’s template.

Revenue Forecasts

These are calculated automatically when you print the various reports that detail your Client Forecast jobs, the estimates in the Sales Pipeline and the Billings Forecast. You can choose to report on Billings, Revenue or Income.

Billings - the gross amount (ex-GST) that you are invoicing to your client Direct Costs - the number of external costs directly attributable to the billings Revenue - Billings less Direct Costs In-house costs - the cost of time and items Income - Revenue less In-house costs.

Overhead Expense Budget

These are created on every Overhead-type job. Every division in your database has one Overhead job that all expenses are recorded against. You can set an overhead budget for each overhead job, these are aggregated when printing financial statements.