Financially Literate Sales Teams Increase Profitability

Over the past year, a number of our global clients have invested in customized finance training for their sales teams - and the results are paying off.

This is different from a general ‘finance for non-finance managers’ as sales teams deal with very specific financial metrics that can have massive impacts on company profits.

Financially literate sales teams will not only protect your margin but know which levers to pull to increase margin and drive profitability.

As a training company, assisting global sales teams with their commercial acumen, we have found that these are the main areas where sales teams struggle:

1. How to calculate markups and margins
2. Understanding how they influence EBITDA
3. The impact of customer rebates & early settlement discounts on the margin
4. Understanding sales uplifts and allocations and how they affect margins
5. Maximizing service attach on deals
6. Impacts of foreign exchange on costings and margins
7. Impact on the margin by omitting items like freight and other costs linked to the sale
8. Credit terms and cashflow
9. Shifting to recurring revenue models

Most companies know this but it’s still worth saying: Sales teams have more impact over profitability than other business functions. Sales teams are in position to improve both gross profit (in dollars) and gross margin.

Sales teams control several levers that affect sales outcomes:

1. Value propositions
2. Product selection
3. Pricing
4. Selling strategies
5. Negotiation tactics?

When it comes to sales, it’s a non-negotiable to know your numbers:

A price increase of just 1% can lift earnings for the average company by over 11%.

If you need to improve the financial literacy of your sales teams in 2024, please DM me to find out how we can help or visit www.accountingmadeeasy.co

Best,

Mark

PS - If you’d like to learn more about EBITDA - what it is, the factors that can influence and improve? EBITDA, join my Linked Live next week on Thursday, to register CLICK HERE.