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But as the most fundamental tool in the financial planning process, a budget can make it easier to achieve your financial goals.

Example of a Sales BudgetĪBC Company plans to produce an array of plastic pails during the upcoming budget year, all of which fall into a single product category.Only 47% of Americans use budgeting methods to keep close track of their spending, according to a 2020 survey by the National Foundation for Credit Counseling. If this is done, the rest of the budget that is derived from the sales figures will also have to be revised, which can require a significant amount of staff time. It is quite difficult to derive a sales forecast that proves to be accurate for any period of time, so an alternative is to periodically adjust the sales budget with revised estimates, perhaps on a quarterly basis. If any sales discounts or sales returns are anticipated, these items are also listed in the sales budget. The unit price may be adjusted for marketing promotions. The basic calculation in the sales budget is to itemize the number of unit sales expected in one row, and then list the average expected unit price in the next row, with the total sales appearing in a third row. Instead, revise the sales budget after an acquisition has been finalized. It is generally best not to include in the sales budget any estimates for sales related to prospective acquisitions of other companies, since the timing and amounts of these sales are too difficult to estimate. The chief executive officer may revise these figures for the sales of any subsidiaries or product lines that the company plans to terminate or sell during the budget period. The engineering and marketing managers may also contribute information about the introduction date of new products, as well as the retirement dates of old products. The marketing manager contributes sales promotion information, which can alter the timing and amount of sales. Most of the detail for existing products comes from those personnel who deal with them on a day-to-day basis. The information in the sales budget comes from a variety of sources.