What do you do if your sales forecasting tools are giving you wrong information?

Sales forecasting is focused on predicting future sales with the help of historical data, market trends, and the relevant factors. The primary goal of sales forecasting is to enable better financial planning, budget allocation, and strategic decision-making. But as times passes there should be improvement in records, We have to update our data accordingly with reference of changing trends. We can not rely on past data, We have to gather new data accordingly. Past experiences can help us to eliminate minor or major human errors or mistakes. And updated can gives us excellent results if we keep it upto date. And it can be corrected by regularly data upgrade and audits.

Good quality input will ensure good quality output. It is as simple as it can get. Sales forecasting is accurate if historical data is filled in correctly. Hence sales teams must be extremely diligent in entering day to day discussions and important events accurately so that the forecast models are accurate.

Double-check your data: Make sure that the data being input into the forecasting tool is accurate and up-to-date. Check for any discrepancies or errors in the data that could be affecting the accuracy of the forecast.

It's crucial to review the assumptions that underlie your sales forecasting tools. Are they still valid given the current market conditions and business landscape? If not, adjust your assumptions accordingly to ensure that your sales forecast aligns with the reality of your business environment. Take into account factors such as seasonality, economic trends, customer behavior changes, and any other relevant variables that could impact your sales projections. By verifying and updating your assumptions, you can improve the accuracy of your sales forecast.

The next step is to evaluate and refine your forecasting models based on your performance monitoring. Analyze the reasons behind any forecasting inaccuracies or bias and determine if adjustments are needed in your forecasting methods or assumptions. Consider incorporating new data sources, improving your statistical models, or seeking additional expert opinions to enhance the accuracy of your forecasts. Continuously refine your forecasting models based on feedback and insights gained from your monitoring process.

Another important step is to assess the impact of external factors on your forecasts. Changes in the market, economy, consumer behavior, regulations, or competitive landscape can have a significant influence on your forecasting accuracy. Stay informed about external developments, trends, and events that could affect your forecasts. Consider incorporating scenario analysis or sensitivity analysis to assess the potential impact of external factors on your forecasts and make necessary adjustments.

The use of multiple tools can help you to have better and more accurate sales forecast . AI and learning machine tools are good options to combine with the traditional ones. The forecast model should be constantly reviewed and adjusted with new inputs that might be now relevant for your business. Finally the human touch of knowledge and experience in the industry you are working for , mixed with the technology , could make the difference in your forecast model.

My personal experience is that whatever tools you are using, still you will need to common sense and some manual work to enrich your data and make sure that your forecasting tools are set right.