Sales & Distribution cost budgeting

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WHAT IS A BUDGET

A budget is an organizational plan stated in monetary terms. It is a list of all planned expenses and revenues. Provides a forecast of revenues and expenditures, i.e. it constructs a model of how the business might perform financially if certain strategies, events and plans are carried out. Enables the actual financial operation of the business to be measured against the forecast.
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Long-term Implication
Capital

expenditure decision affects the company's future cost structure over a long time span. Investments in fixed assets

Eg.

Risk minimization through the systematic analysis of projects.

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Irreversible Decision
Capital

investment decision are not easily reversible without much financial loss to the firm. There may be no market for second-hand plant and equipment and their conversion to other uses may not be financially viable investment decisions are to be carried out and performed carefully and effectively in order to save the company from such financial loss

Eg.

Capital

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Long-term Commitments of Funds

Capital

budgeting decision involves the funds for the long-term. long-term commitment of funds leads to the financial

The

risk.
Hence,

careful and effective planning is must to reduce the financial risk as much as possible.

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Sales Budget
This

is generally the starting point for the preparation of the functional budgets. shows the quantities and values of each products to be sold during the next year, usually broken down into quarterly and monthly figures. may be further classified into product groups, areas or territories, salesman or agent wise, types of customers, etc.

It

It

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Sales Process
Pre-sales Activities Sales Order Entry Check Availability Pick Materials

Receipt of Customer Payment Invoice Customer

Pack Materials Post Goods Issue

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Distribution Budget
Distribution

cost budgeting is any cost incurred by a producer or wholesaler or retailer or distributor (as for advertising and shipping etc) - the total spent for goods or services including money and time and labour.

Cost

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Selling & distribution cost budgeting

After sales budget is finalised and approved, selling and distribution cost budget is prepared based on the selling and distribution planned during the budget-period. Most of the expenses are related to the sales volume, and therefore, estimated by the sales manager. expenses which are not directly related to sales-volume such as advertising, sales 4/15/12 promotion, market research, etc. are determined

Other

The key is to determine how much you'll spend and earn in any given year, and then use that figure to project how you want to grow in subsequent years. you already own a business, it's simply a matter of digging through some records to see where the money went, and deciding where you actually want it to go. If you're a new entrepreneur, you'll need to do some homework and make realistic 4/15/12

If

To get started, answer the following questions:

How much can you realistically sell next year? How much will you charge for your goods or services? How much will it cost to produce your product? How much are your operating expenses? Do you need to hire employees? If so, how many, and how much will you pay them? How much will you pay yourself? How much payroll tax and unemployment tax will you pay? How much money do you need to borrow, and how much will your monthly loan payments be?

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THANK YOU
ARATI NEVREKAR (9) ASHWIN SINGH (10) ASRAR HAMIDANI (11) BINA BHATIA (14) BIRVA DESAI (16) 4/15/12