What is Forward Revenue?
Forward Revenue is revenue that will be received in the future. It is the total revenue generated from the sale of a product or service that occurred in an earlier accounting period.
This figure will represent what you could expect to earn in the future month based on the current projection of your business's performance.
The calculation can be done for any type of income such as product or service offerings but it is most used for forecasting purposes when dealing with products which require extensive production time before they can be sold; this includes manufacturing items like cars, furniture, appliances, etc.
How to Calculate Forward Revenue?
Forward revenue is calculated by dividing your total annual sales estimate by 12 to come up with a monthly amount, and then multiplying that number times four if you are operating on a quarter-year basis (i.e., January through March).
Example, Total annual sales =$60000/12 = $5000 x 4 = $20000 (Forward Revenue)