Forecast vs. Actual Revenue
TL;DR
Forecast vs. Actual Revenue compares your expected revenue—based on pipeline projections—with the revenue you actually close. In B2B SaaS, where recurring revenue is core, this metric is essential for aligning GTM confidence with financial performance. The tighter the gap, the more trustworthy your sales forecasting process. Wide variances often signal pipeline quality or stage discipline issues.
What is Forecast vs. Actual Revenue?
This metric tracks the difference between what your team predicted it would close and what it actually closed in a given time period (usually monthly or quarterly).
Formula:
Variance = Forecasted Revenue − Actual Revenue
You can calculate it as:
- A dollar value (e.g., forecasted $1.2M, actual $950K → variance = -$250K)
- A percentage variance (e.g., actual/forecast = 79%, or 21% below forecast)
Example: If your team forecasted $800K in Q2 revenue and closed $860K, you beat forecast by $60K, or +7.5%.
Why It Matters in B2B SaaS
- It drives executive confidence. Accurate forecasts support headcount, budgets, and investor trust
- It reflects sales discipline. Frequent misses often point to stage mislabeling or rep overconfidence
- It helps finance plan cash flow. ARR predictability reduces risk and improves strategic planning
- It informs pipeline health. Over-forecasting may mean you’re counting on shaky late-stage deals
- It helps train reps and managers. Reviewing forecast vs. actual data sharpens forecasting instincts
How to Measure Forecasted vs. Actual Revenue
Step 1: Pull forecasted revenue for a set time period (from CRM or forecasting tool)
Step 2: Pull actual closed-won revenue from the same period
Step 3: Calculate the dollar and/or percentage variance
Step 4: Segment by:
- Sales team or territory
- Deal type (new logo vs. expansion)
- Forecast category (commit, best case, pipeline)
- Sales manager or rep
Best Practices
- Use weighted forecasting. Assign probabilities to each stage to reduce bias
- Review commit vs. pipeline accuracy. How often are “committed” deals slipping?
- Align with RevOps. Ensure forecasting inputs are standardized across teams
- Debrief misses. If you’re consistently over or under, conduct root-cause analysis
- Integrate with sales coaching. Forecasting is a skill—track how close each rep’s forecast is to actual
Final Thought
Forecast vs. Actual Revenue is your truth meter. It doesn’t just track numbers—it reflects the health of your entire GTM motion. In SaaS, where recurring revenue hinges on predictability, your ability to forecast accurately is just as important as your ability to sell.
FAQs
What’s an acceptable variance in SaaS forecasting?
+/- 5–10% is considered healthy. Anything above 15% consistently signals a forecasting problem.
Should I use bookings or recognized revenue?
Use bookings (closed-won ARR or MRR) for sales forecasts. Recognized revenue is more of a finance metric.
How often should we track this?
At minimum quarterly. Many SaaS teams review forecast accuracy weekly during pipeline reviews.
What tools help improve forecast accuracy?
Salesforce forecasting, Clari, Gong Forecast, or even weighted spreadsheets—what matters most is disciplined usage and rep accountability.
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