“Pipeline” Is Not Money: Forecast Only What Has Earned the Right
Sales reps are optimists. CFOs are realists. We bridge the gap by 'scoring' the pipeline based on evidence, not sentiment. Stop forecasting hope.
The Funnel of Hope
Come, look at this CRM report. It is the “End of Quarter” view.
At the top, we have a massive number: $3,000,000 in Opportunities. The Sales Director is beaming. “We have 3x coverage on our target!”
But let us walk down the list. Let us perform a visual inspection of these “Opportunities.”
- Deal A ($50k): Stage = “Discovery.” Last Activity = “Left voicemail 3 weeks ago.”
- Deal B ($120k): Stage = “Proposal.” Notes = “They liked the demo, said they need to check budget next year.”
- Deal C ($10k): Stage = “Contract.” Notes = “Redlines received from Legal.”
The Distortion: The CRM treats Deal A and Deal B as real potential money. It assigns them a probability—maybe 20% or 40%. It adds them to the “Weighted Forecast.” But to a Visual Investigator, Deal A and Deal B are dead. They are zombies. They are cluttering the chart and inflating our confidence.
The Signal: Only Deal C matters. Deal C has friction. Deal C has lawyers involved. Lawyers cost money; therefore, the intent is real.
The Evidence Scorecard
We need to stop asking sales reps, “How do you feel about this deal?” We need to ask, “What evidence do you have?”
We are going to build a Pipeline Scorecard. We only forecast deals that pass the threshold.
| Evidence Layer | Points | Status |
|---|---|---|
| Budget Confirmed | 10 | Nice to have |
| Decision Maker Met | 20 | Getting warmer |
| Security Review Started | 30 | Serious |
| Legal Redlines Received | 40 | Real Deal |
If a deal scores less than 50 points? It is invisible. It does not exist in the cash flow forecast.
Predicting the Crash
When you apply this filter, your “Pipeline” will drop from $3 million to $400k.
This will hurt. The sales team will panic. The CEO will frown. But this is the Signal.
The $3 million was a fantasy that was going to evaporate on the last day of the quarter anyway, leaving you with a revenue miss and a cash hole. By stripping away the noise now, we see the gap today. We see that we are behind.
And because we see the truth now, we have time to act. We can sprint. We can focus on the few deals that are real.
Do not count the “Maybes.” Count the friction.
FAQs
How do I know if a deal is real?
Evidence. Emails from legal? Security questionnaires? These are signals. 'Good vibes' on a Zoom call are noise.
What is 'Weighted Pipeline'?
Total Deal Value multiplied by Probability. But be careful—Probability is often a guess.
Should I ignore early-stage deals?
For cash flow forecasting? Yes. Absolutely. They are ghosts until they prove they have bodies.