Sales Skills: Basic Accounting
KAS Placement Sales and Marketing Recruiters
Copyright KAS Placement 2010
Crucial Skills for Sales Managers, Sales VPs and Executive Level Sales Personnel
When you’re moving up the sales ladder, whether it be from Senior Sales Representative to Sales Management, from Sales Management to VP of Sales level or from VP of Sales level to Executive Level Personnel, knowing everything there is to know about your new position is going to take some time. Depending on what your strengths and weaknesses are, what comes naturally to you and what you find difficult may be entirely different from another professional going through a similar change. However, there are some basic skills that can help any salesperson make an upward transition more easily. In this post, we’ll take a look at basic accounting.
1. Accounting in Conjunction with Microsoft Excel
As a sales manager, VP or Executive Level Sales employee, you constantly need to be doing basic accounting to accurately predict whether you’re going to meet your sales goals for the quarter. You are also going to need to predict and set future sales goals and be able to evaluate the employees you are managing by looking at their own sales goals and numbers.
The only way to keep on top of the aforementioned sales goals and employee performance, is to learn and become familiarized with basic accounting methods and Microsoft Excel. Don’t worry, you don’t have to be able to adjust basic credit and debits under GAAP (Generally Accepted Accounting Principals) standards. However, you need to know the basics of both a balance sheet and income statement. It might sound hard, but it is actually quite simple.
Here are the basics: a balance sheet is a quarterly report which is essentially divided into three categories: assets, liabilities and stock holder’s equity. For now, let’s focus on equity and liabilities.
For the purposes of this overview, let’s assume that you:
1. Have a good amount of sales representatives under you. This involves new business acquisition employees around the country. To perform this, you have a certain budget or amount of money to spread around accordingly each quarter or year. This amount of money is your “equity.”
2. Have a certain budget to penetrate new and existing targeted regional accounts and have such expensed as employee: payroll, benefits, commission owed and other expenses which may include: employee car and gas expenses and, possibly basic home office expenses, or “liabilities.”
Now that you have the basics, the accounting part is quite easy. First and foremost, you want to ensure that your assets are raising in comparison to your liabilities quarter after quarter. The name of the game is to keep your assets high while retaining a low amount of liability. Once neatly put on an Excel Spreadsheet, you can evaluate your statements and adjust your plan of attack to make your company more profitable and effective.
If you fail to keep a careful record of all your equity and liabilities, you are putting yourself in the dark and will have to guess as to whether or not you will be profitable. To ensure your numbers are accurate you should be in contact with your accounting department at least once a month.
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