Question

What is the difference between an account based forecasting and driver based forecasting?

Answer 1

Account based forecasting takes the historical values of the same account. It doesn't consider the effect of any other external factor. It assumes that history is going to repeat itself . So for example if revenues are increasing by compound annual growth rate of 10%, then account forecasting will simply increase it by 10% . Irrespective of any external factor affecting in future.

Whereas driver based factor consider some other external factor affecting the forecasted value. For example revenues are dependent on GDP growth rate. So if GDP grows by 10% than revenues grows by 10%.