Forecasting Software: How It Can Save You Money Today
One of the most frustrating parts of running a business can be operations and logistics. The operations department within a company is the glue that holds the enterprise together. Without the right products in the right place at the right time, a waterfall of negativity can begin to impact a company. Your sales department will be making empty promises, your finance department will lose out on important revenue, and your customers can grow angry or lose interest in your company entirely. Because customers are the lifeblood of any viable industry and competitors are constantly battling over them, this loss as a result of poor business forecasting can be extremely costly.
What is business forecasting?
Business forecasting is the process of predicting the upcoming future state of your company. This can relate to an array of things, but primarily revolves around the prediction of upcoming sales before they have been made. Understanding how many sales are going to be made in the upcoming sales period allows you to plan. You can plan for the incoming revenue and determine to where it will be distributed. You can plan for the incoming profit and determine which department needs the surplus of funds. You can plan a promotion to get rid of your slow-moving items and free-up inventory space for your top-performing products. You can identify your top locations, products, and even suppliers. The planning capabilities that business forecasting system allows is tremendous.
How can the future sales of a company be predicted?
That is where business forecasting software comes into play. Business forecasting software is a tool that successful companies use to solve the logistical problems and provide the positive outcomes discussed above. Business forecasting software primarily analyzes the previous sales history of a company and runs that data through a series of algorithms to determine the upcoming forecast for the future sales periods. These algorithms are very complex and can identify important factors such as seasonality, trend projection, and moving averages. This way, you can know on a month-month basis what you are going to sell so that you can plan ahead as much as possible. A business forecasting system can even predict events such as holidays like Christmas and valentine’s day that may also have an impact on your sales.
We’ve talked a lot about the benefits of business forecasting software, now let’s discuss a few of the concerns. No forecasting software is perfect, and for that reason you shouldn’t expect 100% accuracy, but any good system will get you 70% or more. Luckily, most software systems will allow you to make adjustments to the forecast and even see what similar algorithms predict so that your team can truly find the most accurate forecast possible. No business forecasting software is free either. Though, in a sense it could be free. Let me explain, on average, most business forecasting software solutions save the company thousands and even millions of dollars in preventing over-stock and stock-out situations alone. That figure helps pay for the price of any forecasting software, in addition to providing a bank of disposable funds. There are also business forecasting software solutions such as ForecastingSoftware.com that provide free trials (in their case 14-days) so that you can play around with the system, import your own data, and see how compatible your business model is with their software.
After weighing your options and analyzing all of the systems out there, it’s hard to come to the conclusion that you can succeed without business forecasting software. The process makes life so easy for your operations department and removes much of the stress/busywork that can negatively impact innovation and motivation. Finding the right solution for you is not always easy though, we understand that every company is different and therefore every solution can be different. That is why a company like Avercast is willing to take the time to design a personalized solution for any company that needs it. This way, they not only help you specifically as a client, but also other clients that use the software and potential businesses that need the same features you need. Go to Avercast.com to check out our custom business forecasting software solution and see how we can help you optimize your operations immediately!