A sales team could include contract telemarketers, in-house salespeople who sell over the phone, a sales company that represents you in the field, or a group of employees who travel to customers.
No matter the structure, costs associated with your sales team can be categorized into direct and indirect expenses. Commission, salaries, payouts, all lie under direct expenses.
Additional costs like travel, lodging, entertainment, food, training, and support print media, can be classified as indirect expenses.
Discussed below are some suggestions to help you track and manage these expenses.
Begin with the right toolkit
Maybe you got that fancy CRM that your sales team can refer to, but it came with a lot of features you never use. Consider how much the SaaS product’s annual expense impacts your balance sheet. Inquire whether it may be replaced with a lighter tool that achieves the same function.
Plan and budget up
Once the sales budget is crafted and the targets are shared – the next step should be planning the expenses that the team manager believe will incur to meet the targets.
Inform and trust
It’s critical to have a written expense policy that specifies which expenses are considered business expenses and which are not. Include limits for what constitutes acceptable expenses for items such as client entertainment, client presents, receiving gifts, and the maximum daily expense for employee meals while on the road.
Once that is done, trust your sales representatives with managing the expenses to meet their goals. Incentivising the sales team is an added motivation to drive higher sales.
Having a third party audit the sales expense receipts is one way to keep employees responsible for the expense policy. Review expense receipts with another department to provide an objective perspective, discover any breached policy regulations and keep the sales team accountable for their expenses. Due to someone else enforcing the regulations, sales managers will no longer be able to make special exceptions.
Build a team you can trust
Hire the right people. Make sure that the sales representatives on your team have their values aligned with company values. Build a team you can trust with smart management of finances to bring in higher returns.
Star salesmen are wanted by everyone, no matter what the face of the economy is. Building a strong team is probably the best way to manage your operations smoothly.
Don’t overlook the cost of salesperson turnover
You do not want to go over the head about controlling expenses. Making your team feel welcomed is as important. Losing a good salesperson is a huge disadvantage.
The cost of acquiring new personnel and training them is added to the loss of losing an already trained representative.
Setting quotas and analysing progress to establish success isn’t enough when it comes to salesforce management. Increased sales aren’t always a good thing for a company if the costs of generating those sales result in a reduced profit. It will be easier to build a budget, choose distribution channels, and set prices if you break down your sales expenditures, including those related to your sales team.
The best way to go about maintaining sales expenses is to generate an expense policy that sets down all rules and restrictions related to spending patterns expected from the representatives, and then leave it to trust while maintaining a positive work environment.
To keep a check, you can always call in a third-party audit, but checking expenses frequently or on your own is not the best idea.[/ohio_text]