How To Forecast Revenue With Ease

author Edgar de Wit

The planning of revenue is often the starting point of your budget cycle. Your revenue expectation forms the basis of the budget.

After this step, you should have sufficient information about the cost of sales, margin, and expected income stream. And, of course, you want the expectations to be well-founded.

XLReporting provides the Revenue Planner for this purpose.

With this best practice budget planner, you plan your products, subscription fees, and grants.

This article explains what the Revenue Planner can do and the benefits you will achieve with it.

Before you start, which data goes into the Revenue Planner?

You need the following information to start using the Revenue Planner. Look at the following list of what is necessary for your organization.

1. Revenue Types
Identify and list all the different sources of income for your company. For example, product sales, service fees, subscriptions, licensing, or other revenue-generating activities.

2. Historical Data
Gather historical financial data related to your revenue streams. Try to spot a seasonal pattern in your revenue stream. You do this by splitting the data into years, quarters, and months.

Use your accounting systems, such as Xero, Quickbooks, or Exact Online. If these accounting systems do not provide correct analysis reports, use a reporting system such as XLReporting.

3. Pricing Structure
Check and update your pricing strategy for each revenue stream. Consider factors such as production costs, market demand, competitor pricing, and customer willingness to pay. Ensure that your pricing aligns with your target market and desired profit margins.

4. Sales Forecasts
Develop sales forecasts for each revenue stream based on historical data, market trends, and sales projections. Consider factors such as new product launches, marketing campaigns, and seasonality.

5. Cost of Goods Sold
Calculate the direct costs, such as raw materials, manufacturing, and shipping expenses.

6. Gross Margins
Calculate the gross margin for each revenue stream by subtracting the cost of goods sold from the revenue. Gross margin represents the profitability of each revenue stream before considering other operating expenses.

By analyzing the above information, you can effectively fill in your revenue budget. Create a comprehensive budget that reflects your revenue projections, cost of goods, and gross margins.

You then need a tool that brings this information together and calculates it. And that in a dynamic and agile process.

We have designed a Revenue Planner that will help you with that.

This planner model calculates the revenue and the correct distribution over the months of your budget year. Of course, this tool provides direct insight into your total revenue budget.

I will explain in the following paragraphs how this will work.

What is the Revenue Planner?

The Revenue Planner is ready to use the budget template of XLReporting.

It allows you to estimate your revenue at the desired level for your organization. There are generally four most common types of revenue:

  • Products: revenue streams from products.
  • Services: revenue streams from consulting, IT services, projects
  • Fees: revenue streams from grants, membership fees, subscriptions, and service fees
  • Other: all other income revenue streams

After selecting your revenue type, XLReporting opens the Revenue Planner.

You will then see a simple input screen with entry lines.

Each line represents a new revenue entry. You can fill it in for a specific customer or customer group. You have complete freedom in this regard.

Next, you enter the expected selling price and quantity for each line.

The More button provides options to fill in the Cost of Sales, VAT, and cash delay. The last two have an impact on your cash flow forecast.

Estimating Revenue at Desired Levels

You can plan your revenue at any desired organizational level. By default, this is set to Company. But you can easily configure this to business units, training groups, projects, etc.

The planner opens at that specific organizational level, and this allows you to fine-tune your revenue. Another advantage is that you can also delegate a planner to your colleague.

For example, you want to have the revenue planner completed per team. Then you give the Sales department access to the team.

The results will saved for the next time. And they are immediately visible in a total revenue budget.

The chosen time frame also plays a role in planning your revenue. The Revenue Planner has a smart feature function with which you can divide the revenue over a budget year.

The default options are monthly, quarterly, and annually. But you can also apply seasonal patterns or historical patterns.

What are the benefits of working with a Revenue Planner?

You can fill in a Revenue Planner using the zero-based budgeting method. The zero-based budgeting method is a dynamic approach that needs a fresh evaluation of all revenue streams.

This approach encourages a comprehensive assessment of revenue sources, cost of goods, and gross margins, enabling accurate budgeting and forecasting.

With each entry, you have to consider whether it is still relevant. It sounds like a lot of work. Especially if you are used to entering your turnover at the general ledger level. However, this provides valuable insights.

During the input process, our Revenue Planner provides immediate insights into your margin, monthly revenue trends, and the relationship between revenue and cost of sales.

You get all these insights in beautiful charts. Another benefit is that you can delegate a planner to your colleagues.

What's next after the Revenue Planner?

Financial planning is an iterative process that requires constant monitoring and adjustment. The Revenue Planner enables you to track actual performance against the budgeted figures, facilitating regular reviews and adjustments as needed.

By regularly monitoring your revenues, cost of goods, and gross margins, you can identify areas for improvement and make data-driven decisions to optimize your financial performance.

You can easily compare the results with the Planner Overview and the Cashflow Forecast.

Once the revenue and income stream are clear. You can start budgeting for the other budget items.

The most logical next action is often the personnel costs. As they are often the highest expense for an organization. XLReporting also provides a template for this called the Staff Planner.


Planning your revenue can be challenging. And it also requires a lot of insights, both from within the organization and beyond. When you have enough information, you need smart working methods to be able to plan it clearly.

With The Revenue Planner, you can clearly plan this information.

The planner ensures the correct calculations and provides immediate insight into your reports. It is suitable for every type of organization. And with the collaboration options increases the capacity and quality of your budget.

If you want to start using the Revenue Planner yourself, a 14-day free trial of XLReporting and begin forecasting better and easily today.

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