In sales forecasting, mistakes are to be expected. However, with each mistake that you make, you should learn something, in order to refine your forecasting methods, and improve the accuracy of your forecasts. As a rule of thumb, the more metrics you track and include in your forecast, the more accurate the forecast will be. In the following post, we will discuss some key metrics that all businesses should track.


Accuracy is not only a characteristic of your forecast but an actual metric that you need to keep track of. There are several ways in which you can measure the accuracy of a forecast.
By the measure of error
Each sales team should measure the error of the forecast which is calculated by taking the absolute value of the difference between your forecast and your actual sales, and divide it by the divisor (the largest value between the forecast and the actual numbers)
Measure of error = (F-A)/F
F – forecast
A – actual sales
By product type
Accuracy can also be calculated by product, a strategy which can be a lot easier for your sales team to implement. This strategy is best suited for off-the-shelf products that don’t have customization options that can complicate the sales cycle. When it comes to complex products, you can simplify the process, by breaking the prediction down into several parts.
By size of the deal
For this strategy, you will start with a less accurate forecast in the early stages of a deal, which you will refine along the way. In the later stages of the sales cycle, you will have a better understanding of the needs of the buyers, which will help you refine your numbers.
By time period
There are two critical stages where you can measure accurately. The first stage is 90 days out, a stage at which your accuracy should be quite low, as the deal is a long way from closing. Nonetheless, there are a lot of early signs that can help your sales reps predict the chances of closing a deal. The second stage is 30 days out. At this point, the sales cycle should be at the final stages, and your accuracy should be above 90% at this point.  


When it comes to complex transactions, it is not uncommon for planned close dates to be pushed back. It is important to track these types of sales and discover indicators that show a deal’s chances of getting postponed. A pushed deal is not a lost deal. In most cases, it is just a deal that is postponed into another quarter, but this will heavily impact your predictions.  Moreover, pushed rates can also indicate a problem with certain sales reps.


The variance is calculated as the distance between the commit and the pipeline upside. This indicator will help you understand how an initial forecast can change from the beginning to the end of a quarter. To improve the accuracy of your variance, you need to be very involved in the deal activity of your reps, but you must also consider their gut predictions. In the long term, tracking the variance will not only help you understand the changes in your forecast, but you will also be able to narrow down the factors that influence these changes.


Depending on your business, and the complexity of your sales cycle, a sales forecast can be balanced throughout a quarter, or it can weight more heavily towards the end of the quarter. To measure the linearity of your forecast, you will have to track the stages of a sales cycle and the close dates. The point of tracking this metric is to adjust your sales strategy so that in the long run you can rely on an accurate and linear forecast.


As most of your forecasting strategies rely on historical data, it is important to keep an eye on your team’s commitment to recording all valuable data. The compliance numbers will show you if all the members of your team have submitted accurate forecasts for the relevant opportunities. Obviously, the sales rep forecasts are refined by a team leader, but unless all the members of your team are committed to tracking all relevant metrics, you won’t be able to improve the accuracy of your forecast

Inventory issues are a business owner’s worst nightmare.
Especially when you’re in a growth phase, and in the middle of expanding to meet customer demand, it can set back your sales team and impact your bottom line.
Whether you’re an e-commerce or brick-and-mortar store, inventory can get the best of you, and when it comes to inventory forecasting, the majority of retail business owners simply don’t know where to start. Failing to have a sales and inventory sales forecasting plan will usually lead to lost sales, time wasted running around in circles.
What’s the solution? Inventory forecasting.
Inventory forecasting assists businesses in optimizing their inventory purchasing what products to buy, how much to buy, and when to buy. Alternatively, it assists in knowing when it’s time to liquidate unsold inventory.
The key with inventory is understanding past trends to the past to predict the future sales potential. When a business is operating on a “what’s to come” basis rather than just focusing on what’s happening now, operations can run smoothly, especially with inventory.
Here are five reasons why inventory forecasting is essential for the success of your business:

  1. Better cash flow

Let’s face it. We’ve all been there. Cashflow is tight because we just made a huge inventory purchase. Then for the next few months, we begin to get anxious as to why it’s not moving fast enough. When you optimize your business with inventory forecasting, you can accurately predict how much inventory to buy every time so you’re not put in a tight spot with cash flow for your business. And in today’s rapidly changing sales landscape, that makes all the difference.

  1. More time

It is not easy running an entire business. Most days, there are several fires to put out at once, locations to run, customers to keep, suppliers to manage and employees to maintain. You’re busy enough trying to deal with daily operations. Investing time in sales foresight is yet another issue on your mile-long list that is eating away at your time. Forecasting involves various preventative measures so you don’t have to spend hours constantly putting out inventory fires. By making it a part of your business operation, you’re ensuring that you will have enough time to run your business actively, instead of reactively.

  1. Simplify operations

With proper forecasting strategies and procedures, you can cut out a lot of complications and processes that are slowing down operations. Inventory forecasting allows simplicity to take over so you can operate on a step-by-step plan instead of jumping all over the place in your inventory tracking.

  1. Save on labor with software

With the ever-increasing technology, businesses are able to cut back on unnecessary labor costs. If an algorithm can do it in way that’s quicker and unbiased, then why hire an employee? Inventory forecasting software is able to complete the simplest tasks to even the extremely sophisticated. One of the more sophisticated tasks, for instance, is predicting what products a customer is likely to buy if they buy a specific one. (eg. if a customer buys product A there is a 93% chance they will also buy product B).

  1. Increased sales

If you’re wanting to ramp up your business to the next level, then it’s time to pick up that money left on the table. Without proper inventory forecasting, your business is losing money. According to a study done by IHL group, retailers lost $1.71 trillion due to out-of-stocks in just one year. This is easy money lost due to lack of forecasting. By preventing out-of-stocks you can prevent a big chunk of lost revenue, and cushion your annual revenue.
As you can see, implementing an inventory forecasting strategy is crucial in ensuring the success and future growth of your business.. Especially when you are in a transition and need to consider whether to hire more people or make that big inventory purchase, inventory forecasting is an essential tactic to lower risk and increase performance in your decision making. 2019 could be the year you save you hundreds of hours of mindless number crunching and even thousands in profit by simply implementing an inventory-forecasting plan.

Running out of stock is one of the last things that any retail business owner wants when a product is in hot demand. It is not only disappointing, but it leaves money on the table by letting your customers search for alternatives from your competitors. To avoid such a scenario, inventory forecasting needs to be utilized and implemented across all retail businesses, from mid-sized operations to large-scale enterprise companies.
Inventory forecasting isn’t simply a matter of analyzing past historical trends and predicting future demands. Accurate inventory forecasting requires the right data set from multiple data sources.
Before diving into the data and stats surrounding demand forecasting, it’s worth noting that, within the supply chain context in the eCommerce industry, there are three main types of forecasting, which are:
Demand forecasting:  This is the investigation of the companies demand for an item or SKU, to include current and projected demand by industry and product end use.
Supply forecasting: Is a collection of data about the current producers and suppliers, as well as technological and political trends that might affect supply.
Price forecasting: This is based on information gathered and analyzed about demand and supply. Provides a prediction of short- and long-term prices and the underlying reasons for those trends.


90% of Retailers Fail in Forecasting Since they Ignore Lost Sales

A recent study carried for 2018-2019 period by Neogrid points out an important aspect that many retailers ignore when making their forecasts. The report says that 90% of small businesses do not use their past lost sales to make future predictions. Most of them only focus on demands which sometimes changes hence resulting in huge losses.

With a report of past losses otherwise called historical lost sales, the prediction will most likely be reliable. If you, therefore, run a retail business and would like to make accurate predictions, then make sure you have figures of your historical losses. Use them together with stats on demand, and your inventory forecasting won’t fail.

Retail Businesses Face Serious Problems Even After Spending a Lot on Inventory Management

Reliable information from Bossa Nova, a leading provider of data service says that one of its surveys found that even despite the huge spending that retail businesses make, 73% of them still make inaccurate forecasts. It further reports that most of the problems encountered are as a result of price inaccuracy among others. It, therefore, means as a retail businesses owner, you need to take the time to get accurate prices if you want to make accurate inventory forecasts.

Automating Your Retail Operations Boosts Productivity and Accuracy

Bossa Nova survey report indicates automation could be all you need to improve your productivity. In fact, 73% of the retail businesses interviewed reported that their employee productivity improved when they introduced robots. Furthermore, the same study says that 74% of the retail business owners interviewed expressed their confidence in automation. They argue that their accuracy in inventory forecasts increased when they automated their operations. You should, thus, consider automating operations as well as predictions if you want to improve accuracy, and most importantly, the productivity of your employees.

67% of Retail Businesses Think that Inventory Analyses and Forecasting is a Waste of Time

While inventory analyses and forecasting is being promoted as one of the strategies of making reliable predictions about the future, some retail businesses see it as a waste of time. In fact, 67% of businesses interviewed in Bossa Nova survey released on 28th Feb 2019 feel that spending time analyzing inventory isn’t a good way to use employee’s time.
Instead of spending time on inventory forecasting, most retail businesses often focus on serving the customers present at a given time forgetting that the future is also important. While such an approach can help maximize profits, it is important to note that demand changes with time. A business can only rest assured of existence in the future if it plans ahead through inventory forecasting.

Most Retail Business Lag Behind Technologically

Over 80% of retail businesses lag behind when it comes to the use of technology to find solutions to problems. What is happening is that technology is rapidly changing, and there are so many new technologies that retail businesses can utilize these days. Are you among those lagging behind? Your retail business can make great strides with the right technologies.
In conclusion, it is crucial for retail businesses to plan for future sales, and how to meet the demands of their customers without running out of stock. Alternatively, having excess supply will also mean losses and failed planning.


Curve uses machine-learning based prediction technology, allowing companies to accurately forecast sales, products, and support requests, to increase revenue and optimize profitability. Our unique technology goes beyond traditional business intelligence, by recommending the right solutions based on use cases and customer segments.