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If you don't have a sales expense budget, it could be the reason your company costs are out of control

by , 03 September 2014
Do your sales expenses drain your company's profit month after month? Could this be because you don't have any measures to control those expenses?

The only way you can save your company's bottom line from this problem is to implement a sound sales expense budget as soon as you can.

Not sure what a sales expense budget is?

Let me explain...

 

This is what a sales expense budget is

 
Sales expenses are expenses directly related to selling your product. For example, the money you pay your sales team in salaries every month is a sales expense.
 
And a sales expense budget lists the type of sales expenses you expect during the budgeted period. This will include fixed and variable expenses. There are nine of these expenses you must ensure you include in your sales expense budget.
 
This budget is vital to the success of your company. Here's why…
 
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Here's why you need a sales expense budget

 
You need to know how many sales you need to make to cover your fixed and variable sales expenses. The expenses are inevitable because you need them to actually make the sales in the first place! If you don't understand what costs will escalate with increased sales, you'll lose control of your spending.
 
For example, the cost of your sales team's sales calls will escalate as the numbers of calls they make increases. 
 
This is an example of the kind of expense that could catch you off guard if you don't budget for it carefully. This becomes an even bigger problem when you push your sales team to make more sales to cover the expenses because this will then push up your variable expenses.
 
There you have it. A strong budget will help you achieve and maintain a balance between these expenses and the income your sales team brings in.
 


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