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If you don't include these nine items in your sales expenses budget your company's profit's could plummet

by , 14 January 2015
When you create a sales budget, you'll use it to predict if you'll make a profit or a loss on your sales.

To do this, you need to know exactly what your sales expenses are.

That's why you need to create a sales expenses budget. This budget must focus only on the expenses you incur to sell your product. This way, you can work out how much you need to sell to cover those expenses.

Unfortunately though, most business owners forget some very important expenses when they draw up this budget. As a result, they lose thousands of rands in profit.

To help you avoid this, I'm going to show you the nine sales expenses most business owners forget so you don't make that mistake...


Make sure you don't forget these nine expenses when you create your sales expenses budget

Fixed sales expenses
1. Sales department office stationery
This might seem like an obvious expense but people often forget about it. Because stationery goes missing quite easily, you'll need to keep buying more. Because of this, it ends up being a rather large expense, so don't forget to budget for it.
2. Rental on your sales department's offices
Naturally your sales team needs to work from somewhere. The problem is business owners don't consider this a sales expenses. So they leave it out of their sales budget and they under-budget as a result.
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3. Sales personnel salaries
This is another expense you might think of as a general overhead cost and not put it in your sales expenses budget. This is a big mistake because your sales need to cover this cost. 
4. Sales personnel fringe benefits
This goes hand-in-hand with your sales teams' salaries and is just as important in your sales expenses budget. 
5. Promotional and marketing materials
To sell your product, you need to market it. This is a massive expense that you need to include as a sales expense. 
Variable sales expenses
6. Sales personnel telephone costs
To make sales, your sales team may need to sit on the phone discussing sales terms with your clients. This expense varies depending on how many sales your team needs to make. 
7. Sales commissions
If you pay your sales team commission on top of their salaries you need to include this as a variable expense. 
8. Travel costs related to selling the product
If your sales team needs to travel to meet with clients, include this as a variable expense. Some months your employees won't need to travel at all, other times they'll have to travel a lot. Look at your highest average travel rate to see what you should budget for. 
9. Client entertainment costs
Meeting with clients might also mean entertaining them. This can get costly so make sure you budget for your entertainment expenses. 
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These nine expenses should make up part of any sales expenses budget. If you don't include them, you could under-budget and lose thousands of rands of your hard earned profit. 
To help you quickly and easily create this budget, use the sales expenses budget template in the Master Budget Series.

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