Setting up lead routing and lead conversion in NetSuite is only the beginning of the potential that the NetSuite sales process provides. An accurate understanding of how to establish quotas and how to do forecast reports is also key. Generating quotas and forecasts in NetSuite gives you and your team tangible goals to aim for and achieve.

Establishing Quotas

According to the Help Center, “quotas are goals you set for sales representatives.” Quotas show your sales reps and teams exactly what they need to be aiming for in terms of their performance over a set period of time.

Assigning a Quota

Let’s start with how to assign a quota to a sales rep or team. First, navigate to Transactions > Quota/Forecast > Establish Quotas. On this page, you can choose the sales rep that you want to assign to this quota. If you want to assign the quota to a whole sales team, rather than just to a sales rep, then choose a sales manager in the Rep field and select the Team Quota checkbox.

In addition to assigning the quota to a sales rep or team, you can also assign the quota to a specific subsidiary. Simply choose the right subsidiary under the Subsidiary dropdown list. Connecting a quota to a subsidiary ensures that the terms of the quota will be based on the data in that subsidiary.

Setting a Quota

Once you’ve chosen which sales reps or teams the quota is assigned to, you are ready to set the terms of the quota. First, choose one of four areas you want to base the quota on: item, department, class, or location. (Note that you can select only one of these.) Then, if you have the Employee Commission feature enabled, you can base your quota on a saved search, which you would select from the Saved Search dropdown list.

Your main task for setting the quota is going to be setting specific dollar amounts for the sales reps to aim for in a given year. Choose the year you want the quota to apply to in the Year dropdown list. You can select the current year or any year five years back from the current year or five years forward. Then, choose the dollar amounts for the year you selected. There are three ways to do this. First, you could enter an amount in the Total field and then click Distribute to evenly distribute this amount over the monthly or quarterly periods of the year. Alternatively, you could enter the amount you want for each period in the first period and select Fill Down to apply this same amount to the rest of the periods. And finally, you could enter amounts for each period individually if you want them to each be different from one another.

Forecasts

According to the Help Center, “sales forecasting is the process of estimating future sales.” Accurate forecasting enables sales reps and teams to know if they are on track to make their quotas for any given period.

Forecast Preferences

Before using forecasting in NetSuite, you will want to set your forecast preferences. Navigate to Setup > Sales > Preferences > Sales Preferences, and select the Forecasts subtab. On this page, you can choose to calculate forecasts as weighted, have quarterly rather than monthly forecast periods, and set a name for the different forecast categories. There are three forecast categories: low, medium, and high. The medium-level forecast should reflect the most likely scenario, while low reflects the worst-case scenario and high reflects the most optimistic scenario. After naming the forecast levels, you can decide which one (if any) you want to be the default on new forecasts.

Some other preferences you can set are whether or not you want to use estimates in forecasts, as well as whether or not you want to insert multiple projected amounts on opportunities and records. You can also set both the day and the time that will be reflected on the weekly view of your forecast accuracy reports. The final two checkboxes allow sales reps and managers to change both the statuses and the probability of opportunities when they save a forecast.

Calculating Forecasts

How exactly does NetSuite calculate forecasts? NetSuite compiles the information in four categories to determine forecasts. The first category includes all opportunities that don’t have an estimate connected with them yet. The second category is any estimates that have been created but that haven’t yet resulted in a closed sale. The third category includes sales orders that haven’t yet been billed. And the final category includes all the cash sales and invoices that have occurred within the forecasting period. NetSuite takes all these things—opportunities, estimates, sales orders, and cash sales/invoices—and adds them together to come up with your forecast for any given period.

Reporting Forecasts

Once NetSuite has crunched the numbers for you, it provides three types of forecast reports to give you a full picture of how your forecasts are measuring up to reality. First, there are accuracy reports. These reports use your previous performance to keep your current goals in check. Second, there are summary reports. Summary reports combine your forecast data all in one place. And third, there are detail reports. A detail report covers the nitty gritty details of the data.

Editing and Overriding Forecasts

Despite its many benefits, the forecast algorithm can’t interpret reality as well as a sales rep can. When a sales rep realizes that forecast numbers will be off, he can edit the forecast using the Forecast Editor. In the Forecast Editor, sales reps can either adjust the probability and status of opportunities (assuming these functions have been enabled for him under Forecast Preferences), or he can override the forecast altogether. Managers can also override forecasts using the Manager Forecast Editor. However, if a manager adjusts a specific forecast, the sales rep involved with that forecast isn’t able to see the change. This arrangement allows the manager to determine what he believes is the most likely scenario while the sales rep still works toward the most optimistic result.

Conclusion

Quotas and forecasts are integral to the NetSuite sales process. They help to track and regulate the work of sales reps and sales managers, providing your company with a highly accurate decision-making tool. We will continue to walk through key NetSuite processes in this blog series, so subscribe to our mailing list to be sure you never miss a post!