Harness The Power of Excel 06 – Using Excel to Monitor Sales

After a couple of months way celebrating Christmas, the numbers gal, Expert Excel Tamer Paula Turk returns. Here we discuss how Excel can be used to monitor sales.

INTRODUCTION

Excel is a superb tool for tracking sales. When used correctly, the tools available in Excel allow for superb customer tracking, stock management, cashflow management, and modelling and projections.

The power of Excel Sales analysis exists in integrating sales data with financial information – and most notably with cash flow projections and debt write offs.

Excel helps you compare options and make better choices.

SALES AND CASH MANAGEMENT

While higher sales are generally viewed as good, here are some warnings.

1. Over investing in capital without sufficient sales generation is one route to cash drain. Or where slow paying customers cause significant reductions in the company bank balances.
2. Over selling and discounted selling is another route, as it leads to profit margins being eroded. In your drive for more customers, you may also target those who have no intention to pay.
3. Expanding too quickly – plush new offices, or hiring too many staff, or running over exorbitant advertising and marketing campaigns that just don’t deliver profitable sales – all ways of diminishing your cash reserves.

What are those 3 key metrics, Paula?

Ideal Customers

Excel is superb for monitoring current cash flows and to project your future cashflow needs.

Slow paying customers, or worse, non-paying customers will have a devastating impact on your cashflow and in your company’s ability for investing.

With the involvement of finance it is easy to get lots of key metrics which relate to sales value (￡s/$s) - and at a more detailed level, payment frequency of your clients.

Your ideal customer has an insatiable demand for your product or service and pays promptly. Even better is when you are in such demand that you get upfront payment (in whole or in part).

Customer needs and wants

By offering a secure and safe database, it helps increase your sales by making customers feel more secure in purchasing from you.

Excel allows you to analyse your various different selling strategies for each marketing and promotional campaign you run.

Customers want the best terms possible - just ensure they pay you promptly.

Campaign Metrics and Growth

Using simple bar graphs soon allows you to do product-by-product comparisons and also campaign comparisons for individual products. The sales can then be compared to impact on cash.

Use Excel to track sales mix and then the ultimate receipt of cash into the bank.

Collating the sales data in a spreadsheet lets you compare progress over time, and to spot upward or downward trends as they occur.

Working with your Excel Tamer to generate sales

An Excel expert can quickly get detailed metrics from huge sales datasets.

There are a number of sophisticated techniques that Excel analysts use to pinpoint where monies are generating the greatest returns.

It all involves conversations with your sales team - it's a combined effort to generate sales and record the quality and quantity of those sales.

Stock management and Sales

The most difficult task is in managing stock so that your customers get products quickly.

Too much stock, erodes your cash balance and reduces profits.

Too little stock and your customers may seek alternate products or supplies if you cannot provide your product or service quickly enough.

By making use of scenarios in Excel, the business needs for cash are quickly turned into sales targets and any corresponding stock reductions.

SUMMARY

Cash is king and ultimately your cash generation must come from sales.

Sales must have sufficient profit margins, and most crucially of all, cash must come in quickly from paying customers.

Excel is a tool to enhance the selling process. Modelling is an incredible tool - especially when used with charts / graphs. It is not a replacement for the hard work and meticulous detail of salespeople – although it will surely focus their attentions, especially with the use of graphs and tables.

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1. Whether you run a large private or public enterprise, or operate in a small start-up, you can optimize your use of Excel. ?By using the tips provided in this series, I will save you time and save you money, plus reduce team frustration. All of which all leads to vastly increased profits.
2. Ask how I can help your team to introduce best practices from the ground up, create better reports and models, reduce the dangers of data misunderstandings, and generate huge savings of both time and money.
3. With a love of maths, maths, maths, and more maths I'm always keen to get my head around your numbers and understand your data. Plus, I'm extrovert too - very much the talk of the office and a great team-mate. Great for building up inter-departmental synergies.
4. Putting some fun into business. It's all very serious - and the numbers tell everything. And yet how we choose to deliver potentially bad news – be it with an open presence or a closed presence – determines hugely how quickly solutions can be developed and used.

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