A record of the salesman's total business is made on the loose-leaf form shown in Fig. 5. This record is made up from the totals of the commodity records, Fig. 4, and the form has the same columns, with an additional column, headed % of total. In this column is entered the per cent which the total sales of each commodity bears to the salesman's total sales. The profits on the salesman's business usually increase in direct ratio to the increase in the per cent of sales of the higher-priced specialties.
This total record is, of course, made up at the end of the month, only the monthly totals being shown. A recapitulation is made at the bottom of the sheet. In the right-hand, or credit, column the gross profit is brought down; in the left-hand column, sales expense is entered, the several items being separated. First, the salary of the salesman and the amount of his traveling expenses are entered and footed, the total being the direct sales expense. Following this is entered the general sales expense that should be charged against the business of the salesman, this item being supplied by the accounting department. The total sales expense is then extended in the credit column and deducted from gross profits, leaving net profits—the real measure of the salesman's value.
Fig. 4. Record of Salesman's Sales Arranged by Commodities
These sheets should be filed in the same binder with the salesman's commodity sales records. A separate index may be used, or they may be filed on top of the commodity sheets, bringing the entire month's record together. To make identification easy, they should be of a different color from the commodity sheets.
Sales records such as these give a complete history of the business of each salesman; they tell the whole story in language most easily understood by the manager. The longer they are kept, the more valuable the history becomes.
Mail Orders. In a business in which occasional mail orders are received, sales of this character may be grouped under some such caption as home office, and treated in the statistical records in the same manner as the sales of one salesman. Where an extensive mail-order department is maintained, it may be advisable to keep records of the business of each mail-order salesman.
Expense Distribution. General sales expense must be distributed, on some equitable basis, over the total sales. There are two logical factors on which this distribution may be made, total sales and cost of goods sold. The latter seems to be the most equitable. If based on total sales, the distribution may actually penalize the salesman who is really the most profitable. For example, one salesman may sell for $2000.00 goods which cost $1500.00, while another will obtain $2200.00 for the same goods; if the expense is distributed on the basis of total sales, a larger amount is charged against the business of the latter salesman when the increase is all profit. On the basis of cost, the same amount would be charged against the business of both salesmen.