Sales controlling is a fundamental component of holistic sales management. Systematic controlling is a necessary condition in the implementation phase in order to support planning and budgeting. Sales controlling helps to recognize undesirable developments in an early stage and to react correspondingly. Therefore, it represents a permanent process consisting of two steps.
(1) First, a systematic comparison of target and actual performance in terms of objectives, measures and resources takes place that goes beyond an aggregated view. For example, a target-performance comparison in the style “Country A 30% above plan, country B 30% below plan – overall it is already right” is not appropriate. Instead, the target/actual comparison must be divided into more detailed planning objects. Cross-compensation can only be accepted, if actual interdependencies exist (e.g. shifting resources from one segment to another).
(2) Second, an analysis of the causes responsible for the identified target deviations follows. There are, on the one hand, external causes such as changes in customer purchasing behavior, unforeseeable measures by competitors (e.g. new product launches) or mistakes by external sales partners that can lead to discrepancies. On the other hand, planning deficits can be responsible for the deviations. Unrealistic planning assumptions, inconsistencies (e.g. between targets and required resources) and problems in other areas of the company are the most common examples for this. Causes of deviation can be obtained, among others, from the analysis of sales figures. The information content of single key figures might be low but can be increased significantly through appropriate comparisons (e.g. with other areas of the company or other businesses). In this context, it is important to limit the number of key figures for systematic controlling to the most central and significant ones. The right selection of key figures always strongly depends on the respective context.