Finance for Sales Managers- Doc

Added on - Sep 2019

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ContentsIntroduction......................................................................................................................................41.1 Calculate gross profit margin.....................................................................................................41.2 Calculate net profit ratio............................................................................................................41.3 Explain the difference between margin and markup and when each of these are used inpractice.............................................................................................................................................51.4 Calculate return on capital employed........................................................................................52.1 Identify different methods used for setting budgets..................................................................62.2 Explain how to establish information needs and identify information sources for setting asales budget......................................................................................................................................62.3 Describe the different approaches to effective consultation and negotiation when setting asales budget......................................................................................................................................62.4 Explain how to develop budget frameworks.............................................................................72.5 Explain how to set a contingency plan for variances to a budget..............................................73.1 Explain how to use the budget to monitor and control performance against budget parameters.........................................................................................................................................................83.2 Explain how to identify the causes of variances between budget and actual expenditure........83.3 Explain how to implement the actions needed to deal with the causes of variances betweenbudget and actual expenditure.........................................................................................................83.4 Explain how to provide information on performance against the sales budget to others in theorganisation......................................................................................................................................93.5 Explain how to monitor the sales budget to identify unethical practice or potential fraud.......94.1 Explain how to evaluate the need for a bonus system...............................................................94.2 Explain how to choose bonus options for sales team members...............................................104.3 Explain methods of setting bonuses........................................................................................104.4 Explain how to calculate the cost of bonuses..........................................................................104.5 Explain how to negotiate bonuses with sales team members..................................................104.6 Describe how to evaluate the effectiveness of a bonus system...............................................115.1 Explain organisation policy for credit agreements with customers.........................................115.2 Explain the process for approving the granting of credit........................................................115.3 Explain how to check creditworthiness of a customer............................................................11
5.4 Explain how to complete a formal agreement with the customer and the financial basis forfuture trading.................................................................................................................................12References......................................................................................................................................13
IntroductionFinance is the measurement and adjustment of managing the overall monetary activitiessustained through pertaining accounting preferences by a company. It can be stated that financialactivities are highly important for the organization so as to measure proper accountingtransaction offered by both the sales team and also the production team of an organization. Hereseveral assessment and evaluation regarding the finance for sale steam has been encapsulated.1.1 Calculate gross profit marginGross profit margin has been considered as the revenue generated from capitalizing cost requiredfor sales from the total sales achieved by the company. The gross profit margin has beencalculated as the formula:[(Sales –Cost of Sales) / Sales] * 100Be the Sales of a company be 50000 GBPCost of Sales = 20000 GBPTherefore Gross Profit = (50000 – 20000) GBP = 30000 GBPGross Profit Margin = (Gross Profit / Sales) * 100 = (30000 / 50000) * 100 = 60%1.2 Calculate net profit ratioAfter calculating the gross profit from the estimated cost of sales and total sales made by thecompany, total expense borne by the organization due to operations are deducted from the totalgross profit achieved by the firm in that respective period. All the variable cost and the fixed costapportioned within the firm are deducted and thus the calculation of the net profit has beensustained. The formula is:Net Profit = [Sales Revenue - All costs (direct + indirect)]Be the Sales of a company be 50000 GBPGross profit = 30000 GBP
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