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Revenue forecasting / arising on a trasaction is usally determined agreed between the parties involved in the trasaction..
when to recognise revenue from a transaction involving the sale of goods is that the seller has transfer the property to the buyer for a consideration...
Revenue from service transaction recognise as the service is perfermed, either proportionate completion method or by the completion service contract method...
Forecasting helps us to plan for the future activities, to ensure smooth operation of the business. Sales forecast helps us to plan our production, purchasing activities, Human resources, Finances etc. ie. Sales and revenue forecast helps us to set up a Budget, which will be helpful in planning and controlling the business operations effectively for the achievement of objective of maximising returns
The sales forecast is the base of the following business plan components:
Purchasing plan for the components required for production.
Capacity plan for manpower and machinery required to meet the forecasted demand.
Production plan to meet the forecasted demand.
Cash flow statement which will illuminate any required funding for successful operations
Sales is the achievement of the marketing team.Revenue is the recognition concept by various Standards.This is the correction made by the Accountants in the understanding of the Sales team.
Sales and revenue forecasting is the backbone of business growth and profitability.Forecasting has the ingredient of the way to achieve it and conditions, disciplining process. This will help cost control measures and set the profit targets.
