When revenue drops unexpectedly, it is possible to find lost sales through effective sales forcasting. When analyzing the individual factors used to create forecasts, companies can often find the issue that is causing a decrease in revenue.


In order to accurately predict sales, income from each product line needs to be broken down by month. Some products are returned or orders may be cancelled, detracting from end of year profits. There are also external factors to consider, such as new competitors, increase in the price of raw materials, and economic forecasts.

Most businesses have certain times of the year where they see an increase in revenue, and other months where income slows down. This is why a monthly breakdown of revenue for all products is so important. Some clients may leave the company and the marketing department may find new customers, effective the overall demand for the product, effecting profits for the year. Add to that unexpected external changes, such as regulations, market shifts, and salary increases, and the prediction becomes more volatile.

The formula used to determine annual revenue is not absolute. Sales do not stay exactly the same year after year. The formula can be used as a guide to predict income and, when revenue declines, the marketing department is able to find lost sales through effective sales forecasting.

A company can alter the formula slightly as they learn about changes that may occur in external factors. Using computer and Internet-based software, businesses can easily track the separate components that create forecasts. Then, the software uses the history of the company to determine future income for three to five years.



Modern software is advanced enough to allow businesses to track information more accurately than was possible before. Internet-based programs can include customer management software, how long a product takes to reach a customer, and daily inventory levels. All of the advances help a company determine if they are where they should be at any given point.

When things do not measure up, looking through the processes allows employees to find lost sales through effective .