Table of Contents
What is Sales Audit?
In sales organizations, the sales audit is a systematic and comprehensive appraisal of the total selling operations. Sales audit appraises the integration of the individual inputs to the personal selling effort, identifies, and evaluates assumptions underlying the sales operation.
It is a systematic, critical, and unbiased review field appraisal of the basic objectives and policies of the selling function and of the organization, methods, procedures, and personnel employed to implement those policies and achieve those objectives; which are predetermined by the sales organization.
Proponents of the sales audit stress the importance of focusing on the overall selling strategy and methods for implementing it rather than examining individual components piecemeal. It uncovers opportunities for improving the effectiveness of the sales organization.
An audit identifies strengths and weaknesses: strengths have the potential for exploitation; weaknesses have the potential for improvements. While an audit implies an after-the-fact evaluation or a backward approach (a carry-over from financial usage), a sales audit provides information useful for planning sales strategy.
Components of Sales Audit
In fact, sales audits have no standardized formats. Each company designs a sales audit to fit its needs. Generally, six main aspects of selling operations come under the purview of sales audit examination, which is as follows:
Objectives
Each selling input should have clearly defined objectives, related to desired outputs. For example, a firm might have the objective of raising its market share from 10 to 15 percent without reducing per unit profit in the organization.
Policies
In the case of policies, both explicit and implicit are appraised for their consistency in achieving the selling objectives.
Organization
In this aspect, it is seen that does the organization possess the capabilities for achieving the objectives? Are the planning and control systems appropriate for achieving the predetermined targets? If an organization is understaffed, or staffed with incompetent persons, there is the least probability of achieving predetermined objectives or ensuring proper control.
Methods
In this step; it is felt that the individual strategies for carrying out policies are appropriate or not. Because it is vain to attempt to upgrade quality and price if the company has already established a strong consumer image for low quality and price.
Procedures
The steps in implementing individual strategies should be logical, well-designed, and chosen to fit the situation. The procedures should allocate responsibility for implementation to particular individuals and explain how the goals are to be achieved.
Personnel
All executives playing key roles in planning sales operations and strategy, as well as those responsible for the implementation of sales programs are evaluated as to their effectiveness relative to stated objectives, policies, and other aspects of sales operations.
Too often, an executive is evaluated in terms of ability to increase sales or profit rather than success in reaching pre-determined objectives, such as increased market share.
FAQs Section
What are the components of sales audit?
Objectives, Policies, Organization, Methods, Procedures, and Personnel are the components of a sales audit.