QS Study

The sales budget is an estimated sale for the budgeted period. The sales budget is constructed by multiplying budgeted unit sales by the selling price. It is prepared by the sales manager. It expresses your intentions/desires. It is the number you actually hope to get from sales. This is where you ‘want’ to go – your ultimate sales goal. It provides an evaluative tool by presenting monthly indexes of the volume of units and returns as hard targets for the sales team. In the preparation of sales budget, the sales manager should consider the following points –

  • Analysis of the previous year’s sales.
  • General trade conditions.
  • Availability of raw materials.
  • Availability of funds.
  • Plant capacity.
  • Seasonal fluctuations.
  • Restrictions imposed by the government.
  • Competition and customer’s preference.
  • The efficiency of advertising.