Sales forecasting tool

Sales Forecasting Tool to Plan Accurately With Some Simple AI

Throughout my career I’ve worked with salespeople, as a salesman, and in roles supporting sales activities. Sales is one of the most important functions of a business as without sales, you have no business, no matter how great your product or service is. 

Sales is the fuel for any business to survive and thrive and this makes planning and forecasting sales one of the most important activities a business does.

That’s why running a business without effective and accurate sales forecasting is a bit like flying a plane without a fuel gauge. Of course, an accurate fuel gauge is not necessary or sufficient for generating or maintaining lift – the Wright brothers got away without one. But there’s a reason why modern planes have them – it gives pilots access to data to make the flight decisions to get from A to B. 

So how are you flying your venture?

Probably the same as most other businesses. 

You gather your sales team and ask them, ”how many sales will we have this year?” 

In the best case scenario, they review last year’s sales and make a guess based on gut feeling and intuition (which is not always wrong). 

Commonly enough though, a misalignment of incentives and company sales culture can manifest as a mismatch between targets (optimised for remuneration incentives) and forecasts (optimised for accuracy).

We can do better. 

And to do this we need to use data. But why is data so important?

According to the Professor of Digital Practice at QUT, Mal Thatcher, the 21st century will be the century where,

“By the middle of the century the only tangible asset on an organisation’s balance sheet will be data”

and this is true for your sales too.

To give you and your business a competitive advantage, we at Biarri have developed a simple, easy-to-use Excel sales forecasting tool for you. So it is time to become data driven now and with Biarri’s new tool this is extremely easy. 

Biarri has taken some basic AI techniques and put them into a spreadsheet that requires no macros, no plugins and nothing to install. The AI techniques in this Excel tool will help guide your sales team to make more accurate predictions for the coming year. 

You don’t need to be an expert in AI to leverage the tool. It does all of the hard work for you and provides you with data driven monthly predictions for the coming year based on quarterly sales patterns. You don’t need to know cutting edge AI to use the tool, just how to copy and base a small amount of data.

You can download the tool below for free. There is no need to leave your email address or anything. Biarri’s mission is to make the world more efficient via better decisions powered with mathematics and we believe this tool has the potential to make a difference for your organisation.

Your New Sales Forecasting Tool

Before you download the tool, it is worthwhile telling you what it is, and how to use it.

It uses historic data to establish a pattern and then extrapolates this pattern to be able to predict the coming year’s sales. 

Not only does the tool provide monthly predictions, it also takes into account quarterly sales cycles. Forecasting quarter-by-quarter aligns it with typical quarterly reporting and also captures the variance in quarterly sales. This quarter-by-quarter approach is designed for industries like retail which have some quarters with greater sales (e.g. Xmas). 

There is also a “bad month flag”. This allows users to indicate if something bad has happened in the past during months (e.g. COVID) and if similar events are predicted to occur in the future (in the PREDICTIONS tab). 

This spreadsheet comes prefilled with data to show you what it should look like. To use it for yourself, remove the data from the Monthly Sales column in the Data tab and replace it with your own data. The calculations and updates will be carried out automatically. All other cells are locked for your safety. 

How do I use the sales forecasting tool?

The steps to using the sales forecasting tool are as follows:

1. Collect exactly 36 months of contiguous sales data leading up to the month you would like to predict from. E.g. if you want to predict the yearly sales from January 2022 until December 2022, then collect the 36 months of sales data from January 2019 until December 2021. The model is set up for exactly 36 months of data, not more or less.

2. Copy this sales data into the Monthly Sales column in the Data tab (in green). The top most entry should be the oldest (e.g. in the example in 1., January 2019) and the bottom most entry should be the newest (e.g. December 2021 in the example in 1.).

Sales forecasting tool monthly sales column

3. In the Data tab now enter the first month for the monthly sales data in the month tab by choosing from the drop down menu (this cell is green). Also choose the year in the year column from the drop down menu (this cell is also in green).

Sales forecasting tool month selection

4. For each month, choose whether a bad event occurred (or not) by selecting Yes or No in the Bad Event column. If normal trading and fluctuations were occuring, then put No. Otherwise, if something truly unusual (e.g. COVID) occurred that significantly impacted your sales volumes, select Yes on the months which were affected by this (this column is coloured green).

Sales forecasting tool bad event input column

5. Once this data has been entered, go to the Model Analysis tab to see the outputs of the model. In the Predictions tab, if you predict that there will be any bad months in the future, select Yes in the corresponding months in the Bad Event column (which is in green). For this to have effect, similar Bad Events need to have occurred in the past otherwise this will have no effect.

Bad event output column

6. Finally, your predictions are shown in a graph in the Dashboard tab, with a table showing the cumulative results for each quarter.

Monthly sales prediction graph

Download the sales forecasting tool by clicking on the button below.

What does Biarri do?

Most companies begin with Excel sheets like the one provided here to start making once off decisions on key parts of their business. It is like the first flight of a plane with an often inaccurate fuel gauge caused by data issues. At some point, organisations need to lift up from Excel to correct, secure, easy to use and more powerful tools and this is where Biarri helps.

Biarri’s main value proposition is to help clients realise operational excellence in the way they run their business via AI. The core of this is excellent, data driven decision making. Biarri catalyses AI driven business decisions by using its cloud based set of mathematical tools, the Workbench.

To discuss how you can leverage your data and turn it into value to reach new operational heights, reach out with the form below now.

Get in touch

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