Forecast Accuracy
How accurately an AE forecasts their own close revenue versus actuals
What is Forecast Accuracy?
Forecast accuracy compares the revenue a team actually achieved with what it forecast. It shows how predictable the sales process is.
Accurate forecasts let a business plan hiring, spending and cash with confidence.
How this KPI is measured
- Function
- Sales
- Sub-function
- Deal Management
- Industry
- All Industries
- Type
- Lagging
- Impact
- Efficiency
- Unit
- %
- Measurement frequency
- Monthly / Quarterly
- Formula
- (Actual revenue / Forecasted revenue) × 100
How to calculate it
Divide actual revenue by forecast revenue, and multiply by 100.
For example, if the forecast was 5,000,000 and actual revenue was 4,600,000, accuracy is 92%.
A result far above 100% is also an issue, since it means the forecast was too cautious. Measure at the same point in the period each time, such as the start of the last month.
Where it is used
Improving planning
Give leadership figures they can trust.
Coaching managers
See who forecasts well.
Testing forecast methods
Compare approaches.
How to improve it
Tips and common mistakes
- Being over is as much a miss as being under.
- Look at accuracy by team, not just in total.
- Do not punish honest forecasts.
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