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Consider these two factors when you create your sales budget

by , 25 September 2014
If you're launching a new product, updating your existing budget or starting a new business, there's one crucial thing you need: A sales budget.

A sales budget will help you benchmark your goals so you can go from where you are to where you want to be.

Need more convincing? A sales budget will also:

• Help you budget for the amount of production units you need to produce; and
• Inform you of how much material you need to buy.

But, before you do anything, we recommend you consider the following two factors when you create your budget to ensure it's effective.


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Think about these two factors when you create your sales budget


Experts behind the Practical Accountancy Loose Leaf Service believe your sales budget's the most difficult budget to prepare because there are two factors that play important roles when you prepare this budget. These are:
 
  1. Internal; and
  2. External factors.
 
The good thing is internal factors are within your control, i.e. advertising or marketing. 

External factors can influence your company in a big way. And that's why your sales budget must also consider:
 
 
  • Seasonal changes and demands;
 
  • Economic factors;
 
  • Government factors; and
 
  • Competition in the market.
 
It's that simple. You must take into account internal and external factors when you create your sales budget. This will help ensure your sales budget is effective.

PS: Check out the Practical Accountancy Loose Leaf Service to get a step-by-step guide of how to create your sales budget.

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