sales budget

Sales budgeting and forecasting methods

1. The concept of sales budgeting

2. The importance of sales budgeting

3. Sales forecasting methods

4. Practical case for sales forecasting

5. Collection policy and its relationship to sales budget

6. Process status (the relationship of the sales budget with the collection budget and the cash budget)

7. Difficulties in preparing a sales budget

8. In this chapter we will explain what a sales budget is and how you can set a sales budget for a company

9. Through our study in the previous lecture of the sales budget is in fact the basic budget when we talk about how to make other budgets (such as production budget - wage budget - expense budgetma

1. This budget represents the sales plan during the period for which it is prepared, and its estimates are made in light of the objectives that the economic unit aims to achieve with regard to the types of products, their quantities, the expected revenues from each of them, the selection of marketing areas, the identification of distribution methods, and the means of stimulating sales.

2. It contains the estimated sales for the budget period, which is the main source of revenues of the establishment

3. The success of the budgeting system depends a lot on the accuracy of forecasting future sales.

1. The sales plan shall be developed in the light of the objectives that the economic unit aims to achieve with regard to the types of products, their quantities and expected revenues from each of them, the selection of marketing areas, and the identification of distribution methods and means of stimulating sales.

2 - The sales budget is the basis for the preparation of estimates for the types of purchases and the quantity of each, the timing of purchase, and the amount of inventory that must be kept of each commodity in commercial companies

3 - The sales budget is a basis for the preparation of estimates for production programs and what is required to implement these programs of commodity requirements, direct work and industrial services, and the percentage of production capacity exploited in industrial companies

4 - The preparation of the estimated budget for sales depends on the results of economic and statistical studies usually conducted by the Department of Marketing Research to predict the needs of the markets of the various goods produced by the company or marketed

5 - Many departments participate with the sales department in the development of sales estimates so that these estimates are verifiable in light of the available possibilities

Sales forecasting depends on sales management in the first place and may resort to using her personal experience to predict sales in light of

1. Past sales trends

2. General conditions of the economy as a whole – external environment

3. Industry Level / Market Research

4. Competitor Activities

5. Credit Policies

6. Pricing policies of the establishment

We may resort to estimation statistically through the equations available on Excel to do this function, on top of which is the equation

1. The cash balance is fed through it so that the cash inflows can be calculated in a timely manner and without it there will be no cash budget and this will be reviewed later in the cash balance

1. Sales management only predicts values

2. The collection department does not have a collection policy

3. Management believes that sales are unpredictable

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