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Sales Budget
Who is going to sell, how much in what time, at what cost?
BUDGET PURPOSES
Planning sales, expenses, territory Coordination Sales Staff Control organization, staff and expenses
Sales Budget
Program designed for a stipulated time frame that highlights the
Sales Budget
A budget is a plan expressed usually in monetary terms. It is a process of allocating a portion of an organizations resources for its various activities for a specified period of time. It helps in planning and coordination of the organizations activities. Sales budgets are developed for the smooth functioning of the sales function.
Compiled by T S Dawar Sales Management Lecture 7 & 8 6
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Developing sales budgets serve two purposes As a mechanism of control and An instrument of planning. There are several benefits an organization derives from budgeting.
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They are Improved planning Better communication and coordination Performance evaluation Psychological benefits Avoiding uncontrolled expenditure.
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Interlink Role
Marketing Plan
Sales Forecast
These expenses pertain to the compensation of salespersons, sales office rent, sales operational expenses, depreciation, interest on cost of assets like vehicles, office space, office equipment, etc. Performance-related Expenses:
These include commissions, incentives, bonus and awards, etc. Activity-related Expenses:
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Types Of Budget
In practice, sales managers prepare three types of budgets Sales Budgets Selling Expense Budget Administrative Budget
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Sales Budget
A sales budget gives a plan showing the expected sales for a specified period in the future.
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Selling Expense Budget
Selling expense budgets details the schedule of expenses that may be incurred by the sales department to achieve planned sales.
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Administrative Budget Administrative budget specifies the budgetary allocations for general administrative expenses that would be incurred by the sales department.
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IMPORTANCE OF SALES BUDGET Its importance can be gauged from the factors given below: It serves as a scale, or a yardstick, to measure the performance/progress of the company in terms of the performance of the sales personnel, regions, products, marketing channels and customers. It helps identify the areas in which the company needs to strengthen or improve its performance. It serves as an indicator to control the expenses associated with the sales activity and to keep a constant watch on the net profits of the company. It helps in comparing the actual performance with the budgeted performance and takes corrective measures if drawbacks appear or to follow the strategy Cont. NEXT SLIDE if the performance is good.Compiled by T S Dawar
Sales Management Lecture 7 & 8 15
IMPORTANCE OF SALES BUDGET Its importance can be gauged from the factors given below:
It helps the planners to frame policies for actual market situations and provides the platform to establish ways and means to get the business where they want it to be. It provides vital statistics to relate and dedicate the resources in an effective manner so as to realise the forecasted sales and convert these figures into reality.
It helps keep expenses under control so that by using scarce resources, the
objective of net profits may be achieved.
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Cont.
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Other factors The nature and degree of competition within the industry
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THANKS
END OF TODAY LECTURE
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