Plan with data—not guesswork. Here’s how to start simple forecasts & plans in Excel

Forecasting doesn’t have to be fancy or expensive. At its core, it’s about translating the sales you’ve already made into a plan for inventory you haven’t sold—yet. This is especially vital for growing product teams juggling limited time, tight cash flow, and evolving demand. The best part? You can get started today using nothing but Excel and your sales data.

Step 1: Begin with Clean Sales History

Export your last 12 months of sales, by category, subcategory, SKU, and product name. Try to include:

Category
Subcategory
Product name and or SKU
Units sold
Month

Once in Excel, make sure the numbers are clean, correctly formatted, and free of anomalies before you move on.

Step 2: Spot Your Seasonality or Trends

Use Excel tools like:

Moving Average: Smooths out short-term fluctuations and shows your baseline.
Seasonal Indexing: Compare each month’s sales to the average to find seasonal lifts.
Trend Lines: Use Excel's charting tools to visualize growth or decline over time.

Are sales steady, growing, or inconsistent? Look for clear signals to guide your assumptions. Remember to note key company activities, holidays, promos, and marketing efforts that may have impacted growth.

Step 3: Build Your Forecasting Table

Set up a table that shows:

Month
Avg Units
Seasonal Index
Adjusted Forecast
Actuals
Variance
MAPE

This lets you adjust your base forecast using planned company activities like promos or holiday ship cut-offs. And track your forecast accuracy throughout the quarter and year. You can scale this by category or even at the SKU level.

Step 4: Turn Your Forecast into a Buying Plan

Use this formula:
Starting Inventory + Planned Purchases - Forecasted Sales = Ending Inventory

This creates your baseline. From there, evaluate ending inventory levels by reviewing planned Sell Through and Stock-to-Sales ratios. If inventory dips too low, adjust your buys up. If it’s too high, trim back.

Step 5: Build in Safety Stock—Strategically

Safety stock helps you absorb surprises like supplier delays or a higher velocity-than-expected promo. While % buffers are common, Sell Through and Stock-to-Sales can give you a more grounded view.

As a general rule of thumb:

80% sell through is strong and keeps 20% on hand for SKUs that are medium to slow movers and or are easy to replenish.
60% sell through might be better for an A-ranked SKU during holiday and or bigger promos.

That said, these targets can vary significantly depending on your inputs and business goals. These metrics tie inventory to actual performance—helping you buy with more precision and less guesswork.

Bonus: Make It Visual

Use simple Excel charts to track forecast vs. actuals monthly. This builds forecasting accuracy over time and helps you refine assumptions season after season.

Closing Thoughts

A practical forecasting system doesn’t need to be complicated—it needs clarity, consistency, and context. By committing to a monthly forecast, tracking variances thoughtfully, and aligning buying with both your forecast and organizational plans, you build inventory systems that support growth—not hold it back.

How to Build a Simple Forecasting & Planning Tool in Excel