Sales Budgeting Methodology

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With the goal of rapidly increasing influence and prestige, companies often include in their financial plans a mandatory increase in profits compared to the previous period. This is considered the main target. But authoritative experts in the field of financing advise abandoning this erroneous practice, putting forward a number of convincing arguments. These include the following:

The sales volume, which depends on many factors, is very variable and never remains at the same level.

Sales revenue depends on the cost philippine country code per unit of goods and the overall sales volume.




Companies make constant marketing efforts to activate and increase sales. The easiest way is discounts. But it is not a fact that with an increase in sales the revenue will increase, often the opposite happens! To prevent this from happening, you should especially carefully think through and plan the following moments:

sales of products in kind to different categories of buyers;

change in the selling price of a unit of production for individual consumer groups;

marketing plan for providing discounts to different categories of buyers;

sales for the upcoming period in monetary terms.

Sales Budgeting Methodology

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Budget items for product sales in physical terms are calculated based on last year's data, but the new document must take into account all business modernization and development activities for the next year. These include:

start of production of new types of products;

expansion of product range;

development of new sales markets, attracting unreached categories of buyers.

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In order to bring the planned sales budget as close to reality as possible, an analysis is carried out by consumer groups. Within such groups of buyers, they also differentiate, highlighting the largest ones, and make calculations using the well-known Pareto rule. It will not be superfluous to once again remind about the seasonality factor. It should be taken into account when planning the sales budget of goods in physical terms. Table 1 presents such a forecast of sales volumes for the year, formed quarterly, for different categories of buyers and for product groups.