It is a basic fact that sales are the lifeblood of all companies. It is important to take note of the fact that sales forecasting is basically the process of estimating a company’s future sales. You ought to know that sales forecast is important because it enables companies to make very informed decisions about their companies. It is important to take note of the fact that accurate sales forecasting also enables companies to predict the short term and the long term performances of the company.
It is always easier for companies to base their sale forecasts on the past’s sales data, the industry wide comparisons and the economic trends. Forecasting sales is one process that enables firms to identify strengths and weaknesses before they set their budget and the marketing plans for the next financial year. This would then allow them to optimize their purchasing and expansion plan.The article below highlights the merits of sales forecasting.
Firstly, sales forecast enables companies to maintain a balanced cash flow. When a company knows if their revenues would grow or shrink in the coming future, they would not get into so much spending but would conserve the cash in order to survive all forms of recessions.It will also enable companies to take great advantage of the special needs or the expansion opportunities that usually come along knowing that in future they would have enough cash to support their business.
Secondly, sales forecasting brings about planning.With sales forecasting, companies will be able to plan on how best they could manipulate the future economic changes to their advantage. In other words, sales forecasting enables companies to establish concrete plans for the future.The certainty that normally comes from sales forecasting is what enables the companies to plan for their future.
Eventually, sales forecasting brings about purchasing power that is just of the right quantity. You should know that it is normally a disaster when a company purchases too much or too little inventory. Sales forecasting enables firms to know what to buy and in what amounts. You should be aware of the fact that sales forecasting would make it easier for companies to adjust their budgets then come up with figures that would enable them to make the right purchases and still have cash to support their business through and through. All businesses should always make sure that they embrace sales forecasting with all that it entails so that they would be more prepared in future and currently too.