Direct Revenue Modeling

Forecast revenue by using a simple assumption or build up a custom line specific to your revenue model

When building a financial model that leverages simple revenue modeling you can drive the revenue directly to the revenue accounts using plan drivers. You can also use custom lines and custom line groups to build up assumptions such as web traffic and conversion rates in order to determine revenue.

In order to do this you would create a driver by navigating to Plans->Drivers and adding a new driver within the "Revenue" section of the pages as shown in the screenshot below.


From the screen shot above we have two drivers each outputting to separate accounts - the first account is "Sales" and the second account is "Sale of Product Income". Both are being counted towards the Sales & Marketing Department.

The next step is to set up what will be the formula to drive the output value - from the math you can see in the screen shot above we are assuming $100,000 in revenue each month that will go to the "Sale of Product Income" account. The second driver is assuming that one third of website traffic is equal to a dollar in sales and applying that amount to the "Sales" account.

So from a simple revenue model we can create a simple $100,000 per month or leverage a custom line for website traffic that is dependent on a different set of drivers, for instance 1,000 visitors for every $100 in digital ad spend.