Sales revenue budget

The starting point for any master budget is a sales revenue budget. For many pharmacy departments, this... 

Operating budget. Presents a pharmacy s anticipated revenues and expenses. In addihon to the cash budget, a sales expense budget provides a vital degree of management control. 

The economic impact of LIMS technology in the QA/QC lab is primarily produced by its ability to speed the delivery of dependable information to those responsible for making immediate decisions regarding the purchase, production, and sale of product. Since the QA/QC lab budget may be relatively small compared with product production costs the improvement in laboratory staff productivity which LIMS offers, may be secondary in importance to its more direct impact on product costs and revenues. 

Alternatively, there may be an incentive to manipulate the business unit s actual results to maximize management s bonus. For example, year-end sales could be shifted between years to increase reported revenue in a particular year. Budget personnel could have such incentives for either of two reasons (1) They might share in the bonus, or (2) they might feel pressure from the managers who would share in the bonus. 

The sales budget, to be of value to the organization as a whole, must be related to future profits or rather to anticipated cash flow discounted to the present. The concept of cash flow can be described briefly as the difference between revenues and direct costs, not to include depreciation. It represents the amount of cash thrown off from the sales and production of a product regardless of the investment. Consequently, for each product in the sales budget, the anticipated cash flow for the coming year can be determined. 

The budgeted increase in revenue derives partly from increased charge rates, partly from better staff utilization and partly from an increased number of staff. All these factors are influenced by the forward sales position, that is by the staff required and the rates earned on the work to which the company is committed in the coming months. Two reports are used for assessing and monitoring the sales position. 

Calculates daily, weekly, monthly and year to date actual results of sales and revenue and compares to budget. 

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