Why You Should Consider the Out-of-the-Box Salesforce Forecasting Tool

Salesforce’s native forecasting tool is a valuable feature that enables sales teams to predict future revenue and manage pipelines effectively. Although it is a fairly simple tool, it does not get used nearly as much as it should. Here, I’ll go through the pros and cons of the Salesforce forecasting tool to help you determine whether and how it can contribute to your company’s overall goals as well as some its shortcomings. 

[If you’re new to Salesforce, you can skip to “The Pros.” For longtime Salesforce users: Please note that this article addresses Collaborative Forecasting, not Customizable Forecasting. Customizable Forecasting was completely retired in the Summer 2020 release and is no longer supported.].

The Pros: 

It is included with your Salesforce license.

It’s “free”—why not spend  a couple of hours getting familiar with it and setting up the tool to see how it works for you? 

It can help inform any future custom forecasting tools you need.

Say you set up the native forecasting feature and it only covers 70% of your needs. This experience will help you figure out what your exact needs are in a custom forecasting tool, which can help you achieve your goals faster. Think of it as a free starting point.

Most major elements are customizable. 

Out of the box you can choose what to forecast on, how to slice it and you roll up the numbers. The tool allows you to predict based on any custom type of revenue field, not just the standard amount field. You can also make forecasts based on industry, product family, territory and revenue category. Lastly, the forecasting hierarchy can function completely independent of your company’s reporting structure. 

It allows for true forecasts, not just pipeline reports.

You can use what is in your pipeline as a starting number, but you can edit that up or down. This means you can include a placeholder number for deals that aren’t yet ready to be in the pipeline. This means your sales reps won’t be putting bogus opportunities into the system just to get their numbers right!

You don’t need to worry about maintaining it. 

Because forecasting is a native tool, Salesforce is constantly upgrading it, whereas with a custom tool the maintenance and grades are totally on you. Although Salesforce prioritizes upgrading some products over others, forecasting has been getting a lot of love over the past year, and we feel that this trend should continue for some time.

The Cons:

Forecast Category Rollups don’t always make sense.

One way to set up forecasting categories is so that they build on each other: Closed Won is just your closed opportunities, Commit includes Closed Won plus the likely ones, Best Case adds mid-stage opportunities, and Pipeline includes everything that could possibly close. The other option is not to combine categories: Commit only includes likely sales, Best Case only includes mid-stage opportunities, etc. The strange part is that each category shows a percentage of the quota. It is clear why Closed Won vs. Quota makes sense, but why show Best Case vs. Quota without including Closed Won? This seems odd and not especially useful for sales managers.

Forecasting is limited to Opportunities. 

You can’t use custom objects or even other standard ones for forecasting. However, as stated above you can use custom fields within Opportunities, so you’re not limited to just the standard Amount field.

Forecasting doesn’t account for manager quotas. 

Salesforce assumes that managers do not carry an individual sales target and only worry about the quotas of their direct reports. In the real world, managers often carry their own quotas in addition to their teams’. Unfortunately, Salesforce only allows one total quota for a manager, which includes their team’s targets. A manager’s own sales count toward this total, but there’s no way to see their individual performance separately.

Quotas don’t work like most objects.

Quotas do not have much in the way of customization. It has no ability to add custom fields, no history tracking and you can’t trigger automations such as flows off of them. And for time period you can only use monthly or quarterly but not annually for some reason.

All timing metrics depend on the close date. 

An opportunity owner’s performance is based on the total amount at the time that the opp closes. Yet a company will often pay out (and recognize revenue) based on when an invoice is paid (e.g., monthly) or performance (e.g.,  when an ad runs or when a service is completed). Realistically, the forecast should be not on a close date but when the revenue actually hits the books. Out of the box Salesforce has no way to handle this.

Salesforce’s forecasting tool may not be perfect, but it is certainly worth considering if your organization is looking to either start or optimize their forecasting capabilities. If you need some help getting started, we are here to help! – please reach out to us!