Page 169 - DMGT205_SALES_MANAGEMENT

Unit 11: Controlling the Sales Effort

2. Selling expense budget Notes
3. Sales department administrative budget.
Sales organisations have different procedures. However, a sequence is generally followed.

Flexibility in Budgeting

It allows the sales managers to continuously monitor financial performances in terms of standard
cost ratios. There is one more dimension of flexibility in sales budget – changed or changing
market conditions necessitating change in firms expenditure of efforts.

11.5 Sales Control

One of the most important responsibility of a sales manager is to exercise control over sales and
the performance of selling activities. Sales need to be controlled both on an ongoing (continuous)
basis as well as overall, periodically. Sales control function assists the manager in ascertaining
which level of sales have been achieved, why there has been a variance and which remedial
action can be taken to achieve the target results.
11.5.1 Purpose of Sales Control

Sales control assists the sales manager in:
1. Initiating remedial steps.
2. Revising the sales policy and strategies followed.
3. Implementing steps for improving the productivity of sales force.

4. Improving the quality of target setting sales plans and budget functions.
5. Increasing sales profitability.

11.5.2 Sales Control System

A sales control system should be set up on the following guidelines:
1. Setting detailed objectives (round key result areas).

2. Establishing standards for appraising performance.
3. Gathering information on actual sales activities and results.
4. Comparing actual with expected.
5. Taking remedial action (need based).
Existence of a comprehensive sales information system in the firm is a prerequisite for an
effective sales control system. This can be done by recording sales by value, by customer, by
sales person, by territory, by distribution outlet, by cash or credit. In addition to invoice other
important documents are despatch notes, customers call reports, daily activity reports, journey
plans, sales quotations, sales expenses forum, discount and allowance records.

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