Sales Management

Control Objectives for Sales Management

(a) To ensure that realistic sales strategies and quotas are developed,
authorised, implemented and monitored;
(b) To ensure that customers and potential customers are identified and
pursued;
(c) To ensure that accurate and up-to-date customer and sales activity data is
obtained and maintained in support of sales activities and reporting;
(d) To ensure that adequate and appropriately trained sales staff are provided;
(e) To ensure that sales staff are adequately managed to maximise their
performance and attain the defined sales quotas;
(f) To ensure that workable sales territories are established and suitably
staffed;
(g) To ensure that sales staff operate within the defined and authorised
company policies (i.e. for prices, discounts, credit rating, etc.);
(h) To ensure that new customers are confirmed as being bona fide,
financially stable, etc. prior to a trading relationship being established;
(i) To ensure that order data is accurately captured and subsequently
processed;
(j) To ensure that sales staff expenses, commissions, bonuses, etc. are valid,
correctly calculated and authorised;
(k) To ensure that the costs associated with maintaining the sales force are
accurately identified, authorised, accounted for, and monitored against
performance;
(l) To ensure that delinquent sales accounts and customers are pursued;
(m) To ensure that customer enquiries and complaints are recorded and
adequately followed-up;
(n) To ensure that all the requirements of export sales are correctly addressed;
and
(o) To ensure that sales staff account for all trade samples, etc.

Risk & Control Issues for Sales Management

1 Key Issues

1.1 Are sales activities conducted in accordance with defined and

authorised strategies and quotas?
1.2 What measures are in place to ensure that current and potential
customers are identified and that customer data is accurately maintained
up-to-date?
1.3 How can management be assured that adequate (and justifiable)
sales staff are provided and that they are suitably trained and
knowledgeable about the company products?
1.4 How are sales staff workloads allocated (i.e. through defined
territories or specific customer allocations) and how does management
measure and monitor performance (i.e. for leads and confirmed sales)?
1.5 What mechanisms ensure that all orders fully comply with company
policies on:-
- prices;
 - discounts;
- credit ratings and limits, etc.
1.6 What measures are applied to ensure that customers are financially
stable and reliable (and what prevents the acceptance of unsuitable
customers)?
1.7 How are individual customer credit limits determined and are they
subject to a higher level of authority prior to orders being accepted?
1.8 How can management be assured that all order data is accurately
captured, conforms to company policies, and is accurately reflected through
delivery and invoice accounting?
1.9 What mechanisms are in place to confirm the accuracy and validity
of sales staff expenses, commissions, bonuses, etc.?
1.10 Are management made aware of the actual costs associated with
maintaining the sales force, and is this data related to budgets and required
levels of sales activities as a means of determining the effectiveness of sales
activities?
1.11 Are sales staff engaged in following up delinquent accounts and
resolving customer complaints (and how is management assured that such
actions are effectively conducted)?
1.12 How can management be assured that all the administrative and
regulatory requirements of export sales are correctly fulfilled?

2 Detailed Issues

2.1 Upon what basis have sales quotas and targets been produced (and are
they realistic and reliable)?
2.2 How are sales quotas rolled down to the sales team?
2.3 What levels of authority would be applied to amendments of the sales
strategy and quotas (and how is this authority evidenced)?
2.4 Are product development, marketing, promotional and advertising
activities coordinated to actively support sales staff activities?
2.5 How is the success (or otherwise) of the defined strategy measured, and
how are changes agreed and implemented?
2.6 Have mechanisms been established to reliably identify potential customers
and marketing opportunities?
2.7 How is customer and sales lead data protected from unauthorised access
and amendments (and how is management assured that it remains up-to-date and
relevant)?
2.8 How does management ensure that data on sales activities (i.e. leads,
confirmed orders, etc.) is accurate?
2.9 Would management be promptly made aware of unproductive or under-
achieving sales staff?
2.10 What mechanisms prevent the establishment of unauthorised, unlawful or
uneconomic trading terms with a customer?
2.11 How does management ensure that adequate time is allowed for sales
staff to implement major changes in sales policy?
2.12 How can management be assured that all sales staff are suitably
experienced and demonstrate an accurate knowledge of company products and
trading terms?
2.13 What measures are in place to ensure that all sales leads are captured,
trailed and accounted for?
2.14 Are sales lead and transactions reported through the agents network
accurately captured, in compliance with the prevailing terms, and taken into
account when allocating commission payments?
2.15 Have authorised procedures been established and applied for determining
and operating credit and trading limits?
2.16 What mechanisms prevent established credit and trading limits being
exceeded?
2.17 Is the acceptance of new customers (or increased limits for existing
customers) subject to suitable authorisation (and how is this evidenced)?
2.18 What measures prevent the acceptance of orders where prices and/or
discounts are outwith the authorised range?
2.19 What measures does management take to avoid losses associated with
trading with financially unsuitable customers?
2.20 Are all orders accounted for?
2.21 Have standards rates for sales staff expenses (i.e. mileage charges, hotel
accommodation, subsistence, entertaining, etc.) been agreed, authorised and
implemented?
2.22 What mechanisms prevent the payment of sales staff expenses claims that
fall outside of the authorised rates?
2.23 Are sales staff expense claims subject to scrutiny for validity and accuracy
(and are they authorised for settlement)?
2.24 Are sales territories and staff journeys optimised in relation to their
operational base, so as to contain travel and overnight accommodation costs?
2.25 How can management be assured that payments of sales commission and
bonus are accurate, based upon actual sales achievements, correctly calculated ,
and authorised?
2.26 What mechanisms prevent the payment of invalid or unauthorised
expenses, commissions and bonuses?
2.27 Are established expense rates, commission and bonuses subject to regular
review, justification and authorised amendment?
2.28 How does management maintain an awareness of all customer
complaints/comments, and how can they be certain that such queries are
effectively dealt with?
2.29 What mechanisms are in place to detect failures to comply with all the
prevailing export sales regulations?
2.30 Are sales staff held to account for all product samples, demonstration
products and merchandising stocks in their possession (and would shortfalls be
promptly detected and followed-up)?
2.31 How is the accuracy of data input from other systems (i.e. planning or
pricing policy) confirmed?
2.32 How is the accuracy of data output to other systems (i.e. order processing
or petty cash reimbursement) confirmed?