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Sales Quota: Dr. Bhumija Chouhan

A sales quota is a sales goal set for a product, division, or sales representative over a specific time period. Quotas motivate sales efforts and are used to prevent unproductive behavior. A sales budget allocates resources for sales activities like expenses over a specified period based on the sales forecast, expected revenue, and expenses. It includes sales projections by product, location, customer, and season. The budget process involves review, communication, approval between departments, and consideration of factors like resources, estimates, competition, and general market prospects.

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65 views29 pages

Sales Quota: Dr. Bhumija Chouhan

A sales quota is a sales goal set for a product, division, or sales representative over a specific time period. Quotas motivate sales efforts and are used to prevent unproductive behavior. A sales budget allocates resources for sales activities like expenses over a specified period based on the sales forecast, expected revenue, and expenses. It includes sales projections by product, location, customer, and season. The budget process involves review, communication, approval between departments, and consideration of factors like resources, estimates, competition, and general market prospects.

Uploaded by

yaash3sharma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Sales Quota

Dr. Bhumija Chouhan

A sales quota is the sales goal set for the product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating sales efforts. Sales quotas are the sum of the total sales of a future period to be achieved by each salesperson. It is the sales goal set for a product line, company division, or sales representative. Accurate sales quota setting prevents non-productive behaviour of sales people.

These are set for specific time period They can be of various types for eg. sales volume , sales activity, etc. They serve as the standards They can be set for different products , salesmen , different territories It is a motivational tool It requires study of market conditions.

Sales Budget
It is a process of allocating a portion of an organization's resources for its various sales related activities for a specified period of time. It depends on the sales forecast expected revenue and expenses.

Budget Purposes
Planning
Co-ordination Control

Features
It consists of three parts; break even, target and projected sales. The budget also includes sales by product, location, customer density and seasonal sales patterns. It provides a plan for both cash and credit sales.

Types of budgets prepared

Sales budget Selling expenses budget Administrative expenses budget

Methods of budgeting

Affordability method

Percentage-of-sales method
Competitive parity method Objective-and-task method

Budgetary procedure
Determining planning style-top down or bottom up actual procedure. Each management level within the sales department approves the budgets for which it is responsible, incorporates them into its own budget, and submits this consolidated budget to the next higher level for approval

Handling competition for available funds within marketing division Selling the sales budget to top management Using the budget for control purposes

Effects of Errors
Expenses such as sales force commissions vary directly with volume.
Expenses such as sales supervisory expenses , are semi variable, fluctuating with changes in volume but not directly. If estimated unit sales volume is incorrect by much , the usefulness of budgeted selling expense figures are impaired as standards of performance.

Flexibility in budgeting
Budget should not be rigid Full advantage of market opportunities must be taken as they appear. If competitors initiate actions not foreseen at the budget making time, funds must be allocated to counter act them. A realistic attitude towards the dynamic nature of the market is a part of effective sales budgeting.

Process of Sales Budget

Review Situation

Communication

Subordinate Budget

Approval of Sales budget

Other Departments

Factors Effecting Sales Budget:


Financial Resources Salesmens Estimates Past Sales Figures and Trends Plant Capacity Competition Availability of raw material and other supplies Seasonal Fluctuations

General Trade Prospects Return on capital employed Orders on hand Other consideration

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