revenue forecast
A projection of future revenue over a defined period — typically monthly, quarterly, and annual. Sales forecasts can be built bottom-up (summing individual deals in pipeline, weighted by stage probability) or top-down (starting from market size or growth targets). Forecast accuracy — how close the forecast was to actual — is a key metric for revenue operations teams and a signal of pipeline management discipline.
When you'd see it: Board meetings, quarterly planning, finance-sales syncs, investor updates.
Why it matters: Inaccurate forecasts create planning problems across the company — finance over- or under-hires, under- or over-invests. The CFO and CRO typically share accountability for forecast accuracy.
Common mistakes: Conflating pipeline coverage ratio with forecast certainty. Having 3× pipeline coverage improves forecast confidence but doesn't guarantee the number — stage conversion rates and cycle length assumptions also drive accuracy.
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