This week, we learned about the importance of forecasting future sales and profit for companies. Of course, there are many factors which can affect the reliability of these forecasts, such as interest rate fluctuations, competitive innovations, new customers, etc. But still, finance leaders must make every attempt to build their business strategy on forecasts that are as accurate as possible.
As you think about your companys ability to forecast future sales and profit, what are two or three of the most significant variables that are difficult to predict?
What information and data would you use to improve the forecast accuracy?
How can you go about collecting and leveraging this data?
NOTE: If you work in an organization where you have no access to sales and profitability data, you may focus your post on the predictability of other variables that impact things like staffing, product delivery or other operational functions.
I work for a government contractor