Every business owner knows how important it is to create a sales budget to forecast your future earnings. Many CFOs draft sales budgets as a template by which to base other crucial budgets within the company. Sales budgets are composed of essential elements, such as sales numbers, revenues, and sales costs. Although sales budgets are a forecast of expected revenues, it is crucial in projecting income according to specific economic conditions, competition, production resources, and expenses.
Below are a few reasons why Corporate Sales Budgeting can help improve team performance:
Empowers Your Business’s Core Strategy
Every business needs a sales budget to develop the right strategy that can help them succeed amidst today’s competitive market. A sales budget is essential to creating concrete and actionable plans that inform every finance team’s strategic planning process. It also informs managers about what they need to adequately prepare the right resources to help them achieve their goals.
Comparing your sales budget from the previous years informs teams as to whether they can improve their resource allocation to get the job done and whether there’s a need to adjust the sales budget for a particular year.
Improves Cash Flow Management
Having a sales budget pays a crucial role in improving how your company manages cash flow. For example, when your sales figures are good, you can allocate more to your marketing budget to drive more sales. Your organization’s sales budget may also affect production budgets because it outlines the products and services needed to meet your sales goals. Without a sales budget, production may get impacted as well.
Establishes Specific Sales Goals
A sales budget includes sales figures that are crucial to your company’s goal tracking. It informs teams with the information they need to set milestones monthly, quarterly, or every fiscal year.
When sales teams have these figures in mind, they are more empowered to do what is needed to achieve them. Sales budgets also play a significant role for KPI tracking to look into the performance of your sales teams or the company as a whole.
Identifies Overhead Costs
Sales budgets are important in determining overhead costs and help them evaluate profit margins to establish the right pricing for your products and services. When an organization uses a sales budget to project revenue and expenses, it can be used to plan other crucial company budgets.
Many organizations are still struggling to include sales in their budgeting process. However, having access to your sales data goes a long way in managing your daily operations, maximising your teams’ performance, and helping your organization prepare the right budget to address internal and external factors that may come up in a moment’s notice.
Why Performance Canvas for Corporate Sales Budgeting
Performance Canvas Financials is a comprehensive budgeting, planning, and reporting software in one that works with your existing ERP system, both on-premise or on the cloud. It also features an add-on corporate sales budget module that automates the collection and analysis of sales information, improves sales and budgeting timelines, and ensures that sales managers can make accurate sales forecasts at a given period. This add-on sales budgeting module helps decision-makers to see the impact of their budget decisions in real-time.
PCF takes care of the end to end FP&A process from budgeting and planning to financial reporting and analysis to financial consolidation. For organizations eager to enhance their sales budgeting capabilities, Performance Canvas promotes better customer service, reduces operational costs, and streamlines the forecasting and budgeting for sales teams. It allows salespeople to enter forecasts or review embedded statistics that can help their teams make informed business decisions.
With PCF’s Corporate Sales Budgeting module, finance teams are better informed with relevant data based on forecasts from years before. They can check their budget, compare YTD sales versus that of the previous year, check last year’s prices versus the current ones, track budgets, and many more. Its Corporate Sales Budgeting module also supports automatic aggregation of prices and quantities per salesperson, which can be used in comparing data from years before.
If you’re keen to find the best corporate finance tools for your organization or would like to know more about PCF’s corporate sales budgeting module through a demo, get in touch with Performance Canvas Financials today.