A revenue bridge chart is generally used to analyze the factors contributing to a specific revenue goal and detail more granular changes in sales from one period to another.
Companies can gain advantages by understanding and tracking their revenue attainment in relation to a yearly target. The chart below provides a revenue bridge illustration for a company's current annual sales target:
The components, or bars, of a revenue bridge chart can encompass multiple data points:
- Existing Revenue: The revenue that the business has already recognized.
- Contracted Backlog: Signed contracts that the business will need to fulfill during the remaining part of the year, with the highest degree of visibility for those contracts to occur.
- Farming Pipeline: This may include the weighted amount of opportunities from current customers within the business.
- Hunting Pipeline: Weighted amount for new customer opportunities.
- Go-Get: The revenue shortfall required to achieve the company’s annual goals, without a clear indication of where that recognized revenue will come from at the time the report is created.
The bars closer to the left represent the most secure revenue components, and the bars on the right represent the most uncertain revenue sources for that company at that particular point in time. Different companies will incorporate different components into a revenue bridge chart. Of course, the final "go-get" portion is the one that every business should strive to minimize to enhance revenue visibility.
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