The terms “sales forecasting” and “sales projection” are often considered the same, but they have significant differences. Understanding these differences can help businesses strategize and develop the company for the better. In this article, we will delve into the details of sales forecasting and sales projection, from their definitions to their differences.
The Definition of Sales Forecasting
Sales forecasting refers to the process of estimating future revenue by predicting the quantity of products or services that will be sold within a specific period, such as weekly, monthly, quarterly, or annually.
The primary purpose of sales forecasting is to enable businesses to plan their finances and allocate budgets more effectively. Consequently, companies can make wiser decisions regarding sales targets, recruitment, and other factors influencing revenue.
Moreover, sales forecasting also helps businesses identify potential problems that may arise, allowing them time to seek solutions and devise plans to address them.
The Definition of Sales Projection
Sales projection is the anticipated revenue that a company expects to generate within a specific future period. This information helps businesses develop strategies for company growth and establish Key Performance Indicators (KPIs).
Sales projection allows businesses to estimate the resources required for company development. Creating sales projections involves analyzing factors such as sales history, industry trends, and consumer behavior.
Differences Between Sales Forecasting and Sales Projection
After understanding the meanings of sales forecasting and sales projection, we’ll discuss to discuss the differences between them.
Terminology usage
The first difference is in the terms we use. Sales projection is mostly about planning inside the company, while sales forecasting is more about talking to people outside, like showing things to investors.
Time period
Another difference is the time they cover. Sales forecasting mostly looks at the short term and gives detailed predictions, while sales projections are more about planning for the long term.
Information detail
Sales forecasting provides more detailed information, such as sales figures breakdown by product, region, or sales channel. On the other hand, sales projection tends to give a general overview of overall sales performance.
Data used
Next, there’s a difference in the information they use. Sales forecasting looks at things like past sales, different types of data, and math models. On the other hand, sales projections consider a lot of things, including qualitative assessment and opinions from experts.
Purpose
Sales projections are typically used internally as a guide for companies in planning and decision-making. Meanwhile, sales forecasting is more often used for external communication, like sharing with the public, investors, and other stakeholders.
Flexibility
Sales projections tend to be more stable and undergo fewer changes, especially in long-term projections. Sales forecasting often needs to be updated and revised more frequently due to short-term market changes.
Effortless Sales Forecasting and Projection with LOKASI Intelligence
Businesses can use LOKASI Intelligence for both sales forecasting and sales projection purposes. LOKASI is a geospatial analysis and location intelligence platform designed to assist businesses in conducting these analyses effectively.
Additionally, LOKASI provides access to various datasets including demographic data, mobile data, Points of Interest (POI) data, disaster data, and others. These datasets serve to augment the accuracy of analysis results.
Learn more about how LOKASI Intelligence can assist businesses by contacting via email: [email protected] or WhatsApp: 087779077750.
FAQ
What is sales projection?
Sales forecasting refers to the process of estimating future revenue by predicting the quantity of products or services that will be sold within a specific period, such as weekly, monthly, quarterly, or annually.
What is the function of forecasting?
The primary function of forecasting is to estimate future sales and enable businesses to plan their finances and allocate budgets more effectively.
What does forecast mean?
Forecast means to estimate or predict. Sales forecasting is the estimation of sales for a future period.
About Author
