As the founder of an emerging tech services company, data-driven decisions are crucial for your success. Forecasting enables that - and a solid forecasting toolchain enables better forecasting. In this article, we’ll discuss three types of essential tools you should include when building a systematic approach towards forecasting.

CRMs

Customer Relationship Management (CRM) tools act as the primary database to store and organize the bulk of your business data, including interactions across touchpoints like email, phone, and live chat. But it goes beyond just tracking the stages of deals in your pipeline. The unified view a CRM offers gives you real-time insights into customer trends and behaviors, making it critical for sales tactics and strategic planning.

Your forecasting journey begins with CRM implementation, utilizing it as your primary System of Record for several data points discussed so far. Popular options like Salesforce, Hubspot, and Zoho are widely used, with the added advantage of community support for implementation and scaling. Opting for industry-standard tools also provides smoother onboarding for your sales team, since they may already be familiar with them.

Accounting Tools

While CRMs are the database tool for understanding revenue and customer, accounting tools manage the financial side of the equation. For most companies, QuickBooks is the tool of choice for accounting and bookkeeping. It will be needed to collate your actuals on revenue and cash along with your costs as you create a complete financial strategy.

Besides traditional accounting platforms, emerging tools may also be worth looking into. For example, tools like Digits utilize AI to enhance financial insights. Regardless of the tool you choose, having accurate financial data is critical not just for creating the forecasts but to compare them against actuals residing in your accounting software.

Spreadsheets

The most indispensable tool I’ve used in my career as an engineer and an entrepreneur is a spreadsheet. Whether it’s Microsoft Excel or Google Sheets, they are perfect for quick modeling, experimentation, scenario analysis, and are dangerously good as a database. The truth is no matter what other tools you use, they will all hit limits of customization. Spreadsheets have the flexibility to allow you to model and experiment to gain a better understanding. This is why they are used in organizations of all sizes in financial forecasting.

To make the most of spreadsheets, master essential skills like formulas, cell referencing, using the “$” sign for fixing rows and columns, HLOOKUP, VLOOKUP, and queries. Spreadsheets also support scripting, allowing you to import data from CRMs, accounting software, and other systems of record. Remember: this is a part of the principle that there should be only one cop of the data.

There are new modern tools like Airtable and Smartsheets that expand on traditional spreadsheet capabilities, but ultimately serve the same purpose. The critical part is to select a tool that lets you effectively calculate, model, and visualize scenarios.

Wrapping Up

Building a robust forecasting toolchain isn’t just about picking tools—it’s about integrating them into your decision-making process. CRMs provide the customer insights, accounting tools offer the financial reality, and spreadsheets allow you to experiment and refine strategies. Together, they enable you to make informed, data-driven decisions to guide your business through growth and change.

A Gift for You 🎁

At Vixul, we spend a large part of our time reviewing the forecasts created by the founders of our portfolio companies. It is amazing for us to see our founders mature as executives and be able to answer questions they couldn't in the past. Unfortunately, most founders struggle with these issues until we point them in the right direction. We believe the lack of guidance on forecasting is a primary issue for early-stage tech services founders.

That's why we're working on an eBook with detailed instructions on how to set up forecasts for sales pipelines. This will help you plan your new year with better foresight. The book will be free for people on our mailing list when it is published, so please subscribe now to ensure you receive it.