2016-12-28 00:00:00 Budgeting English Find out what a sales budget is, why it's important, and what goes into developing one, including a sales forecast. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214515/employees-work-on-sales-budget.jpg How to Create a Sales Budget

How to Create a Sales Budget

0 min read

A company’s budgeting process must begin with its sales budget. The sales budget is established first because its information is critical to formulating all other budgets within the company, including marketing, purchasing, and production. The sales budget is the foundation of the company’s financial plan, which dictates how resources should be allocated to achieve revenue objectives.

Forecasting sales is the most important element of creating a sales budget. Sales forecasting relies on marketing and industry data, historical trends, competitive analysis, economic forecasts, and statistical trend analysis. Once initial forecasts are developed, they are run down the chain for adjustments based on strategic variables, such as projected customer growth, product and pricing changes, promotional plans or events, and staffing or operational changes. Once all of the data is collected and processed, a final sales forecast is established, which is communicated back down the chain.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

Formulating a Yearly Budget

Formulating an accurate annual master budget for your Canadian small business can…

Read more

Yearly Budget Planning: How to Make Room for New Employees

An important step for any business is adding employees. As you help…

Read more

Four Sales Performance Metrics You Should Be Tracking for Success

You can improve your business by measuring your business activities. In an…

Read more