UPilot CRM uses the pipeline not only to show you how your deals are progressing, but also to calculate an accurate sales forecast depending on the probabilities associated with each pipeline stage.
The CRM uses a weighted probability system to calculate the forecast.
To keep things simple, let’s assume there are 3 stages in your pipeline:
- Stage A: Probability – 10% and deal value of $1000
- Stage B: Probability – 50% and deal value of $2000
- Stage C: Probability – 90% and deal value of $3000
Using the above data, the total forecast would be calculated as:
[(Probability A)*(Deal value A)] + [(Probability B)*(Deal value B)] + [(Probability C)*(Deal value C)]
= (10%*$1000) + (50%*$2000) + (90%*$3000)
= 100 + 1000 + 2700
= $3800
This means that based on the current scenario, you can expect a total sales of $3,800 from your pipeline in the coming months.
But…
What if you want to check the forecast for each of the coming months? This is calculated using the ECD (Expected Closing Date) of each deal.
Taking the above data a step further:
| Stage A (Prob: 10%) | Stage B (Prob: 50%) | Stage C (Prob: 90%) |
| Deal 1 – Closing in Sep – Value $300 | Deal 3 – Closing in Sep – Value $300 | Deal 6 – Closing in Sep – Value $3000 |
| Deal 2 – Closing in Oct – Value $700 | Deal 4 – Closing in Oct – Value $700 | |
| Deal 5 – Closing in Oct – Value $1000 |
Now, let’s say we want to calculate the forecast for September:
In this case, only the deals which are closing in September would be taken into account.
As such, the forecast for September would be:
= (10% of value of Deal 1) + (50% value of Deal 3) + (90% value of deal 6)
= 10%*$300 + 50%*$300 + 90%*$3000
= 30 + 150 + 2700
= $2,880
This article is a part of the ‘Accurate Forecasting’ series. Articles in this series include:
