Sales Budget:

A sales budget is a valuable tool that gives a direction to a company with regard to its targeted
sales. It helps to improve the proIitability oI a company. The company makes a Iinancial plan
with regard to the amount oI goods and services that it plans to sell in a year and the price at
which the goods and services are to be sold. This plan is its sales budget.

Sale Department expense Budget:
1he sales deparLmenL wlll alm Lo ellmlnaLe mlscellaneous expenses LhaL relaLe Lo lLems such as flllng
Lechnlques accounL managlng Lravel arrangemenLs wlll be changed such as cheaper hoLel rooms Lravel
accommodaLlons and hlghly reduced Lravel lf posslble llmlLed overnlghL Lravel more drlvlng and less
flylng Also expenses relaLlng Lo Lralnlng supervlslon supporL and Lechnology wlll be alLered or posslbly
ellmlnaLed

AdmlnlsLraLlve expense budgeL
O anticipates administration expenses Irom the Sales and Inventory/Cost oI Goods
ManuIactured budgets
O may include the budgets oI various individuals or groups involved in administration
O may be combined with the Selling Expenses Budget
O administrative expenses portion contains mostly Iixed items (executive salaries and
depreciation on company oIIices)
O The administrative expense budget, also called the sales, general and administrative
expense budget (SG&A) is vital Ior measuring the success oI any company. The more
support a company provides Ior marketing, compensating the sales Iorce, Iinance,
accounting, legal and similar Iunctions, the more prepared it is to make the best decisions
about company operations. In order to sell the SG&A budget to top management, you
need to illustrate the connection between administrative Iunctions and sales.


Production department budget:

A deparLmenL LhaL ls dlrecLly lnvolved ln manufacLurlng producLs Lxamples are Lhe machlnlng flnlshlng
and assembllng deparLmenLs
8evenue expense
A secLor of Lhe company LhaL ls responslble for manufacLurlng producLs or servlces

8evenue expenses are 8evenue lncomes are Lhose lLems whlch are relaLed wlLh Lhe maln commerclal
acLlvlLy(les) of a buslness

Lxpenses and lncomes can broadly be aLLrlbuLed Lo Lwo groups namely revenue and caplLal When a
buslness pursues lLs maln ob[ecLs lL lncurs expenses Lo generaLe lncome 8oLh Lhe expenses and
lncomes ln such a case are of revenue naLure Powever when a buslness parks / lnvesLs Lhe funds ln lLs
nonmaln ob[ecLs or commerclal acLlvlLles and earns lncome ouL of such lnvesLmenLs by lncurrlng some
expenses Lhereon Lhey are noL revenue lncomes and expenses as such lLems of expenses and lncome
are ouLslde lLs maln buslness ob[ecLs Lo pursue

Iorecast|ng ls Lhe process of maklng sLaLemenLs abouL evenLs whose acLual ouLcomes (Lyplcally) have
noL yeL been observed A commonplace example mlghL be esLlmaLlon for some varlable of lnLeresL aL
some speclfled fuLure daLe
Sales lorcasL
Prediction oI the Iuture sales oI a particular product over a speciIic period oI time based on past
perIormance oI the product, inIlation rates, unemployment, consumer spending patterns, market
trends, and interest rates. In the preparation oI a comprehensive marketing plan, sales Iorecasts
help the marketer develop a marketing budget, allocate marketing resources, and monitor the
competition and the product environment.
Sales Forecasting is the process oI estimating what your business`s sales are going to be in the
Iuture.
Sales Iorecasting is an integral part oI business management. Without a solid idea oI what your
Iuture sales are going to be, you can`t manage your inventory or your cash Ilow or plan Ior
growth. The purpose oI sales Iorecasting is to provide inIormation that you can use to make
intelligent business decisions.


(Sales lorecasLlng) Lhe process of esLlmaLlng fuLure sales for your buslness lnvenLory managemenL and
cash flow are dlrecLly dependenL on accuraLe forecasLs lorecasLlng for new buslnesses requlres
research of Lhe LargeL markeL compeLlLors and Lradlng area
a|es Iorecast A predlcLlon of whaL sales wlll be achleved over a glven perlod (usually from a week Lo a
year) Sales managers requlre sales people Lo forecasL ln order Lo provlde daLa Lo producLlon
purchaslng and oLher funcLlons whose acLlvlLles need Lo be planned Lo meeL Lhe sales demand Sales
forecasLs are an essenLlal performance quanLlfler whlch feeds lnLo Lhe overall buslness plan for any
organlzaLlon

Sales lannlng a|es |ann|ng 1he process of deLermlnlng Lhe overall sales plan Lo besL supporL
cusLomer needs and operaLlons capablllLles whlle meeLlng general buslness ob[ecLlves of proflLablllLy
producLlvlLy compeLlLlve cusLomer lead Llmes and so on as expressed ln Lhe overall buslness plan

1he assessmenL of Lhe currenL slLuaLlon ln a sales reglon Lhe seLLlng of ob[ecLlves Lhe formulaLlon of
sLraLegles and LacLlcs and Lhe esLabllshmenL of conLrol and evaluaLlon procedures

Sales Plan
A sales plan contains the objectives of the sales process, the responsibilities and incentives of those
involved in the sales process, and the resources that will be available or used for the sales process. The
sales plan usually includes objectives (sales targets), assigned sales representatives, what products they
are authorized to sell, list of sales roles, responsibilities, and territories.
This diagram shows how a sales process can be managed. !n this example, the sales process is divided
key steps that can be defined and managed. The prospecting step is used to identify new customers or
expanded needs for existing customers. The qualification step is used to determine how many of the
prospects are qualified (real candidates) for the product or service. The interest assessment step is used
to determine how motivated the prospect is to take action to satisfy their need for the product or
service. The factfinding stage is used to determine who are the decision makers and what steps are
necessary to complete the sale. The close involves the consolidation of the previous steps (coordination
of motivated decision makers) so purchases can result. The progress between each step can be tracked
and optimized. !ncluded in the chart is an example activity time sheet showing that step may require
different levels of time commitment and that the allocation of resources (time for each salesperson) is
usually distributed along each step.