Mastering Sales Forecasting in HubSpot: A Guide to Budget vs. Actuals

In a business context, a "Forecast" refers to sales predictions or projected revenue—essentially, the performance targets of the company.

HubSpot’s Forecast tool is designed to help sales representatives and managers collectively manage deal progress and predicted revenue to improve accuracy. This function visualizes progress against set goals and predicts future performance, allowing for real-time analysis of sales or contract renewal prospects over a specific period (monthly or quarterly).

While primarily used by sales teams, forecasting is also valuable for customer service teams (for renewals or upsells).

To improve forecast accuracy, it is crucial to accurately grasp the progress phase of a negotiation. For example:

• Is the rep still investigating the customer's challenges and needs?
• Has a specific product proposal been made, and is the customer considering it?
• Are concrete discussions regarding budget and implementation timing taking place?

By understanding the status of a deal in stages, more precise sales predictions become possible. This detailed progress management allows sales teams to decide on the next best action and draw a concrete roadmap to achieving sales goals. Furthermore, it allows not just managers, but all team members to check progress and build strategies together.

The Difference Between "Forecast" and "Goal"

"Forecast" and "Goal" are often confused, but there is a clear distinction.

• Forecast: Refers to the "likelihood" or "projection" of sales derived from current data. It is a realistic prediction based on the current status of deals and past performance, showing what is likely to happen.
• Goal: Refers to the "ideal" sales figure that a team or individual aims for. This is a target set to drive motivation and serve as a foundation for strategy.

For example, a Goal expresses the ideal: "Achieve $50,000 in monthly sales." A Forecast expresses the reality: "Based on current negotiations, we expect around $45,000 in sales."

By utilizing the forecast function, you can accurately analyze the gap between your goal and reality. Based on that analysis, you can implement effective measures and plan specific actions to close the gap and achieve the goal.

"Budget vs. Actuals" Management Related to Forecasting

"Budget vs. Actuals" management (often called Yojitsu Kanri in Japan) involves comparing and analyzing the pre-set sales target (Budget) against the actual progress (Actuals).

By utilizing HubSpot, it is possible to conduct detailed Budget vs. Actuals management by team, individual, or even department. This facilitates data accumulation and analysis, enabling faster, more strategic decision-making.

When creating a forecast, it is vital to analyze data from three perspectives: Past, Present, and Future. By combining detailed data—such as past win rates, deal velocity, and customer consideration periods—you can derive highly accurate predictions.

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Key Features and Usage of HubSpot’s Forecast Tool

HubSpot’s Forecast tool supports sales activities through four main features: clarifying future revenue predictions, managing KPI progress, linking with multiple pipelines, and managing user access permissions.

The core of sales management in HubSpot is the "Deal" feature in the CRM. This system allows you to record and manage essential forecasting details like Close Date, Amount, and Win Probability. Because you can easily analyze elements like target amounts, current revenue results, and the value of open deals, high-precision forecasting becomes reality. Furthermore, this data is displayed in graphs, allowing for an intuitive grasp of the gap between sales goals and current status.

1. Visualization of Sales Predictions

The Forecast function predicts future sales based on key data from each deal (Close Date, Amount, Win Probability) and graphs it in real-time. This makes it easy to grasp progress toward goals.

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For example, a sales team can see at a glance how much potential revenue each rep is holding at which stage, and how much is expected to close by month-end. This prevents the common problem where managers look at a spreadsheet full of numbers and still wonder, "So, what is the final number going to be?"You can filter the forecast by the following periods:

• Monthly
• Quarterly
• Weekly
• Daily
• Yearly

2. KPI Management

The Forecast function also allows for the management of KPIs (Key Performance Indicators). In sales, you can set and track specific activity metrics that lead directly to goals, such as:

• Number of customer visits
• Number of proposals sent
• Number of new leads acquired

This allows you to visualize and manage not just the final result (revenue), but the critical activities in the process leading up to it.

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3. Visualization of Future Performance

By utilizing data across Marketing, Sales, and Service, you can visualize organization-wide performance predictions.

• Example: Rep A's forecast for this month is $80,000, and their pipeline for next month is $100,000.

These figures can be viewed monthly or quarterly. Because data is visualized in charts, the entire organization can intuitively understand and share revenue trends and fluctuation factors.

4. Integration with Pipelines

A major feature of the tool is its tight integration with Deal Pipelines. HubSpot allows you to set up different pipelines for different products or services and link them to your forecast.For example, you can analyze "Product A Sales Forecast" and "Service B Sales Forecast" individually, or integrate them to create a total revenue forecast. This allows for flexible strategy adjustments based on the status of ongoing deals.

5. User Permission Management

HubSpot allows for flexible management of user permissions. You can restrict access so members only see what is relevant to their role.

• Example: A Team Manager can oversee the entire team's forecast, while individual reps can only edit their own.This is configured in the "Users & Teams" section of HubSpot settings, ensuring data security while maintaining efficient information sharing.

HubSpot Plans that Include Forecasting

The Forecast feature is available in the Professional and Enterprise plans of Sales Hub and Service Hub.

• Sales Hub: Available in Professional and Enterprise.
• Service Hub: Available in Professional and Enterprise.

Note: The Forecast feature is generally available to paid users with a Sales Seat or Service Seat. It is important to confirm the number of seats required for your organization size.

Step-by-Step Configuration of HubSpot Forecast

To maximize the Forecast feature, correct setup is required. The prerequisites are that Deals are created, Win Probabilities are set, and Close Dates are assigned.

1. Organizing Teams

To manage forecasts organizationally, you must first establish the team structure.

1. Click the Settings icon (⚙) in the top right of the HubSpot dashboard and go to Users & Teams.
2. Select the [Teams] tab.
3. Click the [Create Team] button.
4. Enter the Team Name and select the members to assign.This allows you to monitor and analyze forecasts by groups (e.g., Sales Dept, Support Group).

2. Setting Goals

Setting goals enables effective tracking of team or individual performance.

1. Navigate to Reports > Forecast (or Goals).
2. Select a template (e.g., Revenue Forecast, Deals Created, Calls Made, Revenue).
3. Specify the Goal Name, Owner, Duration (Year), and the Pipeline to apply. Click [Next].
4. Enter the goal amount for the selected year by month. You can use the "Apply targets" option to set a uniform amount or distribute it evenly.
5. Configure notification settings (recommended: receive notifications for both achievement and missed targets) and save.

3. Configuring the Forecast Logic

Detailed configuration ensures the forecast matches your business model.

1. Click Settings (⚙) and go to Objects > Forecast.
2. Forecast Deal Amount: Choose from three options:
   • Total Amount: Uses the full deal value.
   • Weighted Amount: Uses the value based on win probability (Amount × %).
   • Forecast Amount (Legacy): Uses manual settings.
   • Advice: Choose the one that matches your company’s accounting standards.
3. Forecast Period: Select Monthly or Quarterly.
4. Forecast Categories: Link your pipeline stages to forecast categories. The standard categories are:
   • Pipeline (Early stage)
   • Best Case (High potential)
   • Commit (Committed/Confident)
   • Closed Won (Done)
   • Omitted (Exclude from forecast)

By mapping stages to these categories, you can quickly filter your dashboard to see, for example, only "Commit" deals.

Practical Methods for Using HubSpot Forecasting

To improve accuracy, do not rely on a single viewpoint. Combine elements like dates, amounts, and detailed ranking.

1. Thinking in Terms of Close Date, Amount, and Probability

Accurate forecasting requires accurate Close Dates.Combine this with "Weighted Revenue".

• Calculation: Deal Amount × Win Probability = Weighted Forecast.
• Example: A $50,000 deal with a 60% probability = $30,000 Weighted Forecast.

Setting this is simple in HubSpot:

• Close Date: Select the date in the Deal record.
• Amount: Enter the value in the Deal record.
• Probability: Defined in Settings > Objects > Deals > Pipelines. Set a % for each stage (e.g., Proposal = 60%, Contract Sent = 90%).

2. Ranking Each Deal (Qualitative Assessment)

We recommend classifying deals objectively using a rating system (e.g., S, A, B) or HubSpot's "Forecast Categories" to remove rep bias.

• Example System:
  • S Rank: 90%+ Probability (Contract imminent)
  • A Rank: 60% (Proposal under review)
  • B Rank: 30% (Early stage)Defining these rules ensures consistency across the organization.

3. Concrete Simulation (Reverse Engineering)

Once deals are ranked (S through D), you can simulate the necessary volume.If a "D Rank" deal has a 5% close rate, you know you need 20 "D Rank" deals to get 1 Close.

• Action: If you are missing your goal, calculate exactly how many new leads or opportunities you need to generate based on these conversion rates. HubSpot automates the calculation, but the strategy comes from the manager.

4. Tracking Progress of Team/Individual Goals

The tool allows real-time comparison of: Goal vs. Actuals vs. Forecast.

• Scenario: Goal is $50k. Actual is $15k. Forecast (Pipeline) is $35k.
• Insight: You have enough in the pipe to hit the goal ($15k + $35k = $50k), but you must close everything in the forecast.
• Action: The manager can immediately see which deals need support to ensure they cross the finish line.

5. Use in Progress Meetings (1-on-1s)

Forecast data is the best agenda for 1-on-1s. Instead of asking "How's it going?", look at the screen.

• "To hit the goal, we need $X amount."
• "Who are the key prospects this week?"
• "Why is this deal stuck?"You can record notes directly in HubSpot during the meeting.

Managing Time Lags Between Booking and Revenue

HubSpot isn't limited to simple "Close Date" revenue. It can handle scenarios where the Order (Booking) and the Sales (Revenue Recognition) happen at different times (e.g., split payments, installments, or post-delivery billing).

By customizing the dashboard (often using Line Items or Custom Objects in higher tiers), you can track:

• Contract Total
• Billed Amount
• Recognized Revenue

This solves the accounting challenges often faced in B2B transactions, such as "closing in March but billing in April."

How to Improve Forecast Accuracy?

1. Accumulate Sales Activity Volume

Accuracy comes from data quantity. The more emails, calls, and meetings logged in HubSpot, the better the system (and the manager) can predict outcomes. Activity data validates the "Deal Stage." If a deal is in "Negotiation" but hasn't had an email in 2 weeks, the data suggests the stage is inaccurate.

2. Analyze Trends from Past Data

Compare this year's performance with last year's.

• Does sales velocity slow down in August?
• Do deals close faster in Q4?Comparing simply month-over-month can be misleading due to seasonality. Always compare Year-Over-Year (YoY) to identify true trends and realistic growth.

Benefits of HubSpot Forecasting for B2B Sales

Using this tool moves sales from "intuition and guts" to "data-driven strategy."

• Resource Allocation: Focus time on deals with the highest probability or strategic value.
• Risk Avoidance: Detect potential shortfalls early enough to launch marketing campaigns or sales sprints.
• Performance Improvement: Visualizing attainment motivates reps. It also provides objective feedback for coaching ("Your closing ratio is low, let's work on negotiation skills").

Summary

HubSpot's Forecast function is indispensable for improving the accuracy of sales predictions and streamlining the management of "Budget vs. Actuals." A forecast is an estimate of reality; a goal is the ideal. By analyzing the gap between the two using concrete data (dates, amounts, probabilities), you can execute strategic measures to ensure success.

For those struggling with forecasting or KPI management:Consider consulting a HubSpot Certified Partner. Experts can propose solutions tailored to your business model to ensure smooth implementation.

Frequently Asked Questions

Q: What can I do with the HubSpot Forecast function?A: It allows you to predict future revenue based on deal data (close date, amount, probability). It visualizes the pipeline to help teams create action plans. It supports real-time analysis by period (month/quarter), user permission management, and KPI tracking.

Q: What is the difference between "Forecast" and "Budget vs. Actuals"?A: "Forecast" is a prediction of the future (an outlook). "Budget vs. Actuals" is the management activity of comparing your Target (Budget) against your Results (Actuals). The Forecast serves as the bridge in Budget vs. Actuals management, showing where you are likely to land compared to the budget.

Q: Can I manage it if there is a time lag between the Order and Revenue (Sales)?A: Yes. HubSpot can handle complex cases like split payments or delayed revenue recognition. By using custom objects or specific report configurations, you can manage "Bookings" and "Revenue" separately on the dashboard.

Q: Which plan is best for building a Budget vs. Actuals dashboard?A: For advanced customization (like custom "Revenue Objects"), Operations Hub Enterprise or Sales Hub Enterprise is recommended. For standard forecasting features, Sales Hub Professional or Service Hub Professional is sufficient (requires paid seats).

Q: Can I manage KPIs (or KDIs) with the Forecast tool?A: Yes. You can track KDIs (Key Do Indicators / Activity Metrics) such as number of calls, meetings booked, or proposals sent. This visualizes the actions necessary to achieve the financial goals.

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