The Importance of Sales Forecasting Free-Samples for Students

Question: How can Sonia persuade her manager that sales forecasts and sales budgets are not only useful but essential in Sales Management and Control? Answers: The importance of sales forecasting and sales budget Sales forecasting is a crucial thing to carry out in a company. It helps in conducting the sales business. Sales being one of the most important activities that a company can deal with and need to be handled with a lot of care and creativity. It is a reality that a good forecasting will help improve strategic plans because it increases the knowledge about the market. The forecast provided by the sales force is an important source of information that helps in the management of the operations of the business (Armstrong, 2003). Sonia, being the new sales manager should advise her manager that sales forecasting is helpful in sales planning whereby the forecasts made by the sales representatives. In this case, it helps in the identification of potential customers, and whether their objectives have been met. She should also advise her manager that sales forecasting is the best thing to help estimate the demand for the products sold. The sales representatives are in a better position to find the information that would anticipate the demand for the products in the market. The manager should be made aware that the more accurate sales forecast is, the better the position of the company to organize its inventory and take full control of it to avoid overstocking and out-of-stock situations. With proper demand forecasting, the company is able to control its supply chain and production. In this, the resources are managed appropriately and ordering process is fully taken under control. Lastly, Sonia should urge the man ager to allow sales forecasting to be carried out because it assists in financial planning. Having a good sales forecasting in place, revenues and net income can be increased accordingly (Kahn, 2003). Just like sales forecasting, a good sales budget is quite vital to the company. It assists departments to perform their duties in line with the strategies of the organization. The employees will be able to refer to an already designed sales budget whenever they need to develop a new sales budget. This is helpful because it saves time. It also has organizational importance because it looks at the organizations budget as a whole. This is important because different departments function in relation to one another. All the companies will work according to the budget made on sales. For instance, a production department may want to relate the production rate to a number of stock sales department would be able to sell within a given time; therefore, it would be necessary for a proper budget be done to ensure that particular volume of products is available at the time it is needed. The manager would be in a position to gauge the performance of sales department by referring to the sales budget in place. It will be possible to know those sales representatives that are performing and under-performing ones through the sales budget. It is used to set clear objectives for the sales department and helping the sales representatives to work towards achieving these objectives to uphold the overall sales strategy. References Armstrong, J.S. (2003). Principles of Forecasting A Handbook for Researchers and Practitioners. Norwell, Massachusetts: Kluwer Academic Publishers. The Journal of Business Forecasting, P. 21-25