Monitoring Sales Activity

Written by Patricia Tunstall
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Monitoring sales activity is one of the primary responsibilities of management. A sales activity report is issued by the accounting department for the purpose of keeping the decision makers in a company informed about the financial elements affecting the business. Since sales volume and revenue are key indicators of the health of the company, sales activity software that tracks these factors is invaluable.

Sales revenue does not equal profit because expenses have not been deducted, but sliding sales get the attention of shareholders and management alike. Such a decrease needs an explanation, and management can only understand such an occurrence after accurate reporting from an accounting department that has been monitoring sales activity. Although sales revenue is a simple concept, its relationship with other important financial elements in a business operation is complex.

Cash Flow and Sales Revenue

Cash flow from operating activities, or profit, is a sign of the vitality of a business. Adequate cash flow is essential to even open for business, but also to enable the company to expand and take advantage of opportunities that arise. Other necessary business functions that negatively affect cash flow--but are required for growth--must be carefully controlled.

Accounts receivable and inventory are two of the most obvious factors that have to be kept in check, yet have to be expanded to increase sales revenue. Extending credit to customers may be critical to obtaining more business, and a growing inventory is needed to meet the growing demand for the company's products. By receiving reports from accounting on sales activity and analysis, management can stay on top of any changes.

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