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A sales audit is a review of a company's entire sales process, from the use of particular types of software, to the staff, to management strategies. This type of audit is different from a financial audit in which a company evaluates their operating costs against their sales revenues. A sales audit evaluates the effectiveness of every aspect of the sales process and helps companies determine whether or not their methods are cost effective and beneficial in generating revenue. Some businesses choose to perform this process themselves, often with the aid of specialized audit software, and others prefer to have an outside consultant objectively carry out the evaluation.
Sales auditors may begin by analyzing the atmosphere in which a company works, both externally and internally. The external environment refers to the market size in which a company markets their product, the market demand for that product, and the growth trends in that area. The internal environment refers to the culture of the company itself, including the ways in which the sales team interact with one another and the nature of their relationships with their managers. This typically provides a basis for the sales auditor to evaluate the sales performance a company desires versus what they are actually achieving.
Auditors may next consider a company’s specific goals and the sales tactics used to achieve those goals, including long-term and short-term goals. The audit can evaluate how effectively management communicates its sales goals to the sales team, for example. It also can be used to analyze whether the sales strategies used during the time frame of the audit reflect those goals. These strategies may include setting numerical goals for sales teams, offering rewards in the form of contests and commissions to encourage the team to achieve those goals, and monitoring the achievement of those goals in a timely manner.
A company’s sales structure and hiring process may also play an important role in the sales process, as it relates to the structuring of various departments that work together to assist the sales team. A company can request that their auditor review the inner workings of their support staff, such as accounting or billing departments and marketing departments. The sales auditor may seek to learn how these departments work together with the sales department and whether they effectively communicate with one another regarding interdepartmental needs. Some audits may use this facet of the process to help a company evaluate future and potential employees by constructing hiring guidelines to enable the company to hire personalities that fit well within their specific sales structure and company culture.
At the end of a sales audit, a company typically receives a report delineating their strengths and weaknesses and suggested ways in which they might improve their overall sales tactics. The general goal of a sales audit is the improvement of overall sales performance in regards to management expectations and the increase in the predictability of results. Repeated, predictable results in regards to sales productivity typically guarantee the sales process is functioning with a high degree of reliability and efficiency.
A sales audit can be bad news for employees. Let's face it, companies are not going to spend money on consultants or specialized software to do an audit if they don't think there is a problem.
As a result, a lot of these audits include detailed performance reviews for employees in an effort to weed out weak links in the company who may be affecting the bottom line.
However, employees generally know when an audit is being conducted. As a result, they tend to be on their best behavior during the process, making the auditor's job more difficult.