What is Sales Forecasting?Sales forecasting is the process of predicting the amount of product that will sell within a defined timeframe. With these predictions, you’re given an idea of the amount of revenue that you’ll make during that period.
This article will outline the three types of sales forecasting and then go into seven benefits seen from using sales forecasting tools.
Why do I need sales forecasting software?Well, if you have a business that sells something, you can use sales forecasting software. Without it, there’s no way for you to know how much you’re going to sell. That might not sound like the end of the world, but it should.
When you’re aware of your future consumer demand (what’s going to sell in the future), you’re able to prepare in ways you never could without that knowledge. This can save you time, money, energy, and many other resources.
Simply put, if you utilize sales forecasting tools in your business, you’ll notice remarkable improvements in your operational efforts.
Types of Sales ForecastingThe types of sales forecasting are defined simply by the length of time projected by the forecast. The three types of sales forecasting are: short, medium, and long term.
Short term sales forecast: 3 – 6 months
Medium term sales forecast: 6 months – 2 years
Long term sales forecast: 2 – 5 years
The 7 Benefits of Sales Forecasting Software
1. Sales Planning
With reliable forecasts you can make efficient plans regarding your sales. The success of your company revolves around the success of your sales. Being able to see into the future outcome of your business helps you to plan efforts, like marketing and promotions, that will come to fruition.
2. Production PlanningIf you have effective sales planning, you’re set up to have great production planning as well. When you know how much you’re going to sell, you know how much you need to produce. You need to produce the amount of product that will be sold, not more and not less. It’s financially beneficial for you to be aware of these amounts, so you plan production for just the inventory you can successfully sell. This will help you avoid overstock and stockout situations.
3. PurchasingOnce you plan your production, you know what you need to purchase to be prepared to carry out those plans. Purchasing based on sales forecasting tools helps you eliminate both under and overspending.
4. Reduced Inventory CostsRather than spending on excess inventory, with sales forecasting software you’re able to buy a much more accurate number of materials. Not only do you avoid over and under spending, but accurate levels of inventory positively influence other operational areas, such as reducing warehouse costs.
When you save money by having correct quantities of inventory, you also start to see other reduced costs. One of these large areas is the reduction of warehouse costs. Since excess inventory doesn’t need to be managed, your warehouse is able to run much more efficiently. You see higher turnover rates, successful shipment procedures, and much more. On the same scope, there are less instances of insufficient product to meet orders, so your warehouse doesn’t have to scramble to make do. All around, your warehouse operations are greatly improved with sales forecasting software.
6. Effective Labor ManagementThese warehouse improvements sound great, don’t you agree? However, they each require one common element: employees.
All these operational improvements in your warehouse allow you to have much more efficient labor management. You’re able to employ workers who are right for the job, and only need to schedule and pay for absolutely necessary labor hours.
7. Performance TrackingAs the above benefits continue to happen, you’re able to track their performance with retail sales forecasting. Not only do you see improvements in sales and production planning, operational costs, and labor management, but with the ability of performance tracking you can identify further areas with potential to improve.
How can I get my hands on some good sales forecasting tools?You’re probably thinking sales forecasting software sounds great. You’d be right. As mentioned above, there are so many areas in your company that are strengthened as you implement sales forecasting tools.
At Avercast, we’ve been in the supply chain world for over 40 years. In that time, we’ve worked on providing the most accurate sales forecasting software on the market. With 250+ algorithms, our software can predict almost anything you could ever want a forecast of.
Our experts would love to talk with you and discuss how your company could see immediate benefits from using our software. Every company has at least one area where they could improve. Contact the Avercast team today to learn more about our sales forecasting software’s ability to improve your company. We are confident that you’ll be stronger with Avercast sales forecasting software than without it.
Call or schedule a free demo today!