Sales budget


A sales budget is a report that details an estimate of a company's sales revenue in a given period.

This estimate would be made based on internal and external data of the company, since it is necessary to take into account previous years of the company and the behavior of external agents, such as competition, customers and the public sector.

Goals of a sales budget

This budget is used to mark the company's strategy at the beginning of the new economic cycle, generally 1 year.To do this, the sales budget integrates how much product is going to be sold, at what price, in how long, where and how that sales revenue will be produced.

Based on these sales income, the company must establish objectives and a route so as not to deviate excessively from the estimate and try to exceed it, which is quite difficult because it is usually a document that is usually true to reality with exceptions.

In addition, it is usual for the sales budget to include an estimate of how the sector in which the company is going to be, in order to determine the weight and importance of the company in the market.

How to make a sales budget

To develop a sales budget, you must first include the following information and calculations:

  1. Period for which it is prepared.
  2. Compilation of real data and previous budgets from previous years.
  3. Estimation of the objective exercise, responding to what, how much, where and how the company's products will be marketed.
  4. Estimation of the role of the company in the sector and its evolution.
  5. List of exceptions and factors to take into account in possible market turns.
  6. Conclusion and final data of the report.

Summarizing, we can say that with these six points we would initially have a fairly simplified sales budget with the essentials. However, each company and sector can adapt it as best suits them to make the most of it.

Sales budget example

Given a company that is dedicated to the manufacture and sale of its brand of vehicles, we will briefly prepare a sales budget.

First we are going to prepare the budget for the year 202X, so we have to compile the final conclusions and estimates of the budgets of previous years to compare them with the actual data obtained afterwards. In this way we see how successful we have been in the past with our predictions.

Secondly, the company's sales estimates are made and the role it has and will have in the sector is argued, in addition to presenting an analysis of this.

An example of a simple sales estimation chart could be the following:

Factors / Semester1st semester 2nd Semester
Number of units1,000 units1,500 units
Price by unit2€1.8€
Total gross sales2.000€2.700€
Price deductions250€150€
Total net sales1.750€2.550€

It can be seen that analysts have determined that although they already have a fixed price for the first six months, lowering it could increase billing. This may be caused by a process of deflation, by a crisis in the sector, or simply by wanting to adopt a different strategy to try to grab more of the market.

Finally, once the estimates have been explained with their caveats regarding unforeseen future events or specific problems that may arise, the conclusions and final data section of the report would go, in which guidelines would be advised to be taken into account by the management of the company.

Selling expenses

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