Revenue Maximization is a major component of Sustainable Profit Growth Framework (SPGF). Generating Sales is primary responsibility of Sales & Marketing Heads , however Finance Heads , as a part of Corporate Management has also to play an important part in this. Finance function arranges funds from Banks and Institutions on basis of some Revenue Projections. Hence Finance Head is an important stakeholder in ensuring that Revenue is Maximized.
Revenue Maximization involves following steps :
- Realistic Sales Plans : It is observed that Sales Plans are made with optimistic mindset. This is the reason that most of the times Sales Targets are not met. Finance Head should ensure from an independent view that Sales Plans are based on ground realities.
- Alignment with Production and Supply Chain : Finance Head as a key part of Annual Budget Team has to see that Sales Plan is properly aligned with Production , Manpower and Material availability.
- Funds Availability : Finance has to ensure that sufficient funds are available for Long Term and Short Term Capital .
- Control over Discounts, Credits and Price Cuts : Finance Head has to ensure that there is adequate due diligence given to discount and price cuts policy advocated by marketing department.
- Achievement of Targets : Finance function has to keep watch on Achievement of Revenue Targets set for Month and Quarter. Any shortfall on targets has to be escalated by Finance to Top Management.
Implementation Steps :
Key Implementation Steps :
1. Development of Sales & Revenue Plan
2. Production & Resources Alignment Plan
3. Development of Discounts & Rebates Policy
4. Monthly Sales MIS
5. Integration with ERP