Combining Backlog and Pipeline Reviews for Better Forecasting Services

Read Time: 4:16 minutes

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One of the most important ways to enhance forecasting for CAS clients is by integrating backlog and pipeline reviews. This simple but effective process has been a game-changer for my clients, especially those with recurring revenue streams or future-dated project wins.

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Backlog Reviews: Predicting the Future While Catching Past Mistakes

I meet with the applicable client monthly or quarterly when incorporating a backlog review. It takes no more than 30 minutes once you get it established. We review a simple spreadsheet similar to the one in the image below. There are two main benefits to reviewing the backlog:

1. Improved Forecasting: We use the backlog to predict future income, which helps us determine when to hire, when to cut back, and how to manage cash flow better. Imagine being able to foresee the need for an extra hire six months in advance because you've got ten projects starting in May. That's the power of a solid backlog review.

2. Catching Missed Invoices: Backlog reviews have repeatedly revealed missed invoices. I can't tell you how often we've spotted invoices that never entered the accounting software during these reviews. This process serves as a second set of eyes.

During the review, we add new deals and remove lost clients. Before the meeting, my team looks for potentially missing invoices for me to discuss with the client. This consistent review also helps clients sleep easier, knowing they have a clear picture of their future revenue and that any missed income is being captured.

Pipeline Reviews: Keeping Sales Accountable

But backlog reviews are just half the story. Pipeline reviews can add even more value to your client, especially for clients with a sales team. By monitoring potential future revenue, pipeline reviews offer insight into what might be coming down the pipe regarding new clients and projects.

If a client doesn't already have a pipeline review process, I help them start by setting up a simple process similar to what I used when I worked at a top-100 firm. It doesn't need to be complicated to be effective, but it does need to cover the essentials.

The most important data I like to track in these pipeline reviews are:

1. Proposals Issued: How many proposals have been sent out?

2. Value of Proposals: What's the total dollar value of those proposals?

3. Likelihood of Win: What are the chances of closing each deal? We track this as a percentage.

When you track the pipeline consistently, it provides owners with the answers they need for accurate forecasting. With the pipeline review in place, the owner can hold the sales team accountable and ask the right questions: Why are proposals down this month? Why hasn't this deal closed yet?

The best part? They don't need to play the bad guy. They can point to the pipeline data and the forecast and say, "We need more deals closing if we're going to hit our revenue targets to hire another employee or throw that kick c@$ party." That's where you, as their advisor, step in to help them build that accountability system.

By helping them implement and track these key metrics, you ensure they have a solid foundation for sales performance and financial forecasting. It's not just about numbers—it's about setting the business owner up with the tools they need to succeed.

How It All Ties Together

Combining backlog and pipeline reviews with your forecasting services gives a fuller picture of your client's financial health, helps you catch mistakes, and provides invaluable insight into their future revenue streams. It also empowers the business owner by giving them a structured way to check on their sales team without getting into the weeds.

The result? Better forecasting, better cash flow management, and fewer missed invoices.

Thanks for reading, Luke Templin!

P.S. There are two ways I can help you grow your CAS offerings when you are ready:

1. Join my How to Start Offering Advisory Services Cohort. The next one starts in January.

2. Cannot wait until January? Check out the pre-recorded version here.