The result is a smaller negative variance in gross

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Unformatted text preview: ing the actual sales were lower than planned. Positive numbers here mean actual sales were higher than planned. As you look at the variance for the sales forecast for the first three months, you should see several important trends: 1. Unit sales of systems are disappointing, well below expectations. 2. The average revenue for systems sales is also disappointing. 3. Unit sales for service are disappointing, but dollar sales are way up. The Variance setting automatically shows plan vs. actual results for the different tables in the menu. 4. Sales are well above expectations for software and training. HURDLE: THE BOOK 20.4 ON BUSINESS PLANNING Adjusting the Sales Plan The Adjusted Sales Plan in Actual Table illustration shows how the company from the previous page makes its course corrections. Compare the difference in the February and March columns in the Beginning Sales Plan illustration, the original plan, page 20.3, and the Adjusted Sales Plan in Actual Table shown below. ADJUSTED SALES PLAN IN ACTUAL TABLE The illustration shows revisions in the April and May columns, even before they happen, to reflect the changes shown in the January-March period. In this example, if the company knows by March that real sales will be different from planned goals in April, they should estimate the revised forecast, as a correction to future results. When the actual results are available, they can replace revised plan numbers with actual results. The actual results area can then become a plan area for course corrections. In the Adjusted Sales Plan in Actual Table illustration above, notice how the forecast has been revised for April and May. Since the company knew systems sales would be down, they planned on it and made a revised forecast in the actuals area. The same revision affects projected profits, balance sheet, and — most important — cash. CHAPTER 20: PLANNING FOR IMPLEMENTATION The Starting Plan for Profit and Loss 20.5 PLANNED PROFIT AND LOSS Following the sales example in this chapter, the Planned Profit and...
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