Forecasting unit sales revenue streams

If you want to enter the number of units you expect to sell, along with the price for each, choose the Unit Sales revenue stream model. Upmetrics will use these assumptions to calculate your forecasted revenue automatically.

How you define a unit depends on what your business sells. For a product-based business, a unit could be one shirt, computer, or another individual product. For other businesses, a unit might represent a consulting engagement, contract, service package, pallet, or another measurable quantity.

Upmetrics now gives you two ways to set up your revenue forecast. You can describe what your business sells and let Finance AI draft your revenue groups and streams, or you can choose to create them manually.

TIP: If your revenue is better forecast using service charges rather than units, refer to Entering service charges revenue streams.

Adding a Unit Sales Revenue Stream

Creating Revenue Streams with Finance AI

1

Go to the Finance Forecasting module, select the Forecast tab, and open the Revenue section.

You will see a guided revenue setup asking What does your business sell?

2

Enter a short description of your products, services, and the different ways your business generates revenue.

Once you have entered the details, click Draft my revenue.

TIP: Add enough detail to identify your main revenue sources. This helps Finance AI create more relevant revenue groups and streams.

3

Finance AI will create a suggested starting point for your revenue forecast. Review the proposed revenue groups, stream names, pricing, volume, and growth assumptions.

You can use the Edit icon next to a stream to make changes before adding it.

If the suggestions look correct, keep the streams selected and click Add these streams.

NOTE: The suggested figures are only a starting point. Review the assumptions and update them to match your actual business expectations.

4

The selected revenue groups and streams will be added to your forecast.

From the Revenue section, you can review each stream and update its assumptions whenever required.

Creating Revenue Streams Manually

1

If you do not want Finance AI to draft your revenue streams, click I'd rather set it up myself from the revenue setup screen.

2

Enter the name of your Revenue Group, then enter at least one revenue stream inside that group.

You can click Add another stream to add more streams to the same group or Add a group to create another revenue group.

When you are ready, click Create these.

3

Upmetrics will create the revenue stream and open its Assumption window.

Under Basic Info, review the revenue stream name and select Unit Sales as the Revenue Stream Type.

4

Under Products & Pricing Details, enter the number of units you expect to sell.

You can forecast a Constant amount or use varying amounts depending on your expected sales.

If you use a constant amount, enter the number of units you expect to sell for the selected period.

You can also estimate the percentage change in units over time.

If you choose varying amounts over time, enter the number of units you expect to sell during the applicable months.

Inventory Tracking: If your business needs to keep track of products or materials held in inventory, enable inventory tracking for the revenue stream. For more details, see Adding and managing inventory for product-based Revenue Streams.

5

Price: Enter the amount you plan to charge for each unit. You can use a constant price or enter varying prices over time.

If applicable, enter the sales tax rate. Upmetrics will use this information when calculating your forecast.

6

Refund: Enter the refund rate you expect for this revenue stream, if applicable. This allows the forecast to account for estimated product returns or refunds.

7

Start and End Period: Select when this revenue stream begins and, if applicable, when it ends.

Review your assumptions and click Save to apply the changes.

Once saved, the revenue stream will appear under its revenue group in your forecast. You can open the stream again whenever you need to review or update its assumptions.

Where does this entry appear in the financial statements?

Your revenue streams are used to calculate the applicable revenue lines in the Profit & Loss report.