How to Forecast Revenue in Salesforce with Product Schedules

In Salesforce Tips & Tricks by Danielle Campbell

Patrick Dennis • July 13th, 2020

Finance departments work diligently to make sure the opportunities that the sales team closes lead to revenue. The finance team’s success in this area largely rests on their ability to measure and forecast revenue. When it comes to understanding and forecasting future revenue, sometimes something like a simple forecast category on your Opportunities doesn’t quite cut it. Projecting and recognizing revenue can be a tough task for finance managers, and in the worst cases, it’s often a guessing game.

Having come from a background in financial reporting software, I have seen the headaches caused when executives and finance departments lack a firm grasp on revenue recognition. And although there’s an ever-growing army of companies choosing to use Salesforce for managing their sales processes, I’m often surprised that many of them continue to extract Salesforce data into stale spreadsheets when trying to recognize revenue on their closed deals.

Thankfully, there’s a better way. And depending on your Salesforce setup, it’s usually only a few clicks away. I’m referring to Product Schedules, an out-of-the-box feature that lives right on top of the Products your company uses for Opportunities in Salesforce. Product Schedules allow you to generate delivery and revenue schedules for the deals that you close or plan to close, enabling your finance team to better predict future revenues.

Here’s an example of Product Schedules in action. Imagine a company that’s running a deal cycle where they will be selling both software licenses and services to one of their customers.

While working the opportunity, the sales rep must properly associate the right Products to the Opportunity in Salesforce.

During this process, the rep selects the necessary products and clicks “Save.”

Because things are looking up, and they’re feeling as though this opportunity is going to successfully close in the near term, it’s now the perfect time for either the sales rep or the finance manager to establish a schedule for the delivery and payment of this product or service. And this can easily be done if you’ve turned on “Product Scheduling” in the Setup Menu of Salesforce.

After you click “Establish,” all you need to do is tell the system when, how often, and for how long revenue will be received for each of these products.

Once saved, the following screen will display a pre-built schedule with revenue amounts evenly distributed over the timeframe specified. At this point, you can customize any details as you see fit.

Now, all you need to do is repeat this process for each Product on the Opportunity, until all Products have schedules associated with them.

Once each of those Opportunities has schedules, it’s easy to generate reports and dashboards that will help the finance office better understand the amount of revenue they can expect during any given time period. By utilizing the “Opportunities with Products and Schedules” report type, you can create reports and dashboards displaying scheduled revenue by Product, Product Family, or any other variables you might need.

*Pro tip: You can even “weight” the revenue amounts based on deal stage probabilities, just in case you’re building revenue schedules for opportunities that have yet to close. This allows you to be much more precise in how you’re projecting revenue over any given time period.

After you’ve constructed your reports, you’re all set! Now, the finance office doesn’t need to spend excessive hours exporting Opportunity data into spreadsheets to project and recognize revenue. Plus, all relevant stakeholders have real-time access to understanding revenue amounts over time, simply by refreshing their dashboards.