Problem of regional sales profit Trade center management
Everything has two sides, profit assessment must exist some shortcomings, as previously proposed by the regional manager of the above, the problem of how to define reasonable profit goals, short-term profits and long-term goals how to combine, how sales and other personnel involved in the distribution of profits and tricky very practical problem. But if the region to implement profit assessment, implementation of regional profit Trade centers made it really difficult?
Sales profit center area is actually a virtual operating system to set specific sales area of a profit center, the regional sales manager for the general manager of the virtual company deemed the company based on sales revenue target regional business year, minus the company approved The corresponding standard cost, minus planned delivery of operating costs, expenses, to determine the target profit of the large area, and mainly to regional sales target profit reached or not to measure the regional manager of the operating results, which the operating pressure and power together organically. The company is headquartered in terms of, on the one hand is the management responsibility down, it can also clear where the company’s center of gravity, to understand what areas is the key source of corporate profits, which areas need more attention and more investment in the company, the company in business management and resource allocation on a more direction and focus.
I believe that, if an enterprise from the following aspects, still can effectively implement regional profit assessment.
A reasonable definition of sales Profit Center
The company’s national sales system generally fall into City district, province county, township and other three or four, in order to save operating costs and other considerations, there is no need to have set up sales companies in every province, city, could be considered a large region or province as the unit set up a profit center (virtual company). Established profit center principles are: the headquarters of the sales system in line with the company’s overall management vision, the area to be independent with sales, administration and finance staff, area sales are large enough (typically should account for more than 5% of the company), there is a certain area The potential and growth. Regional profit center under the sub-region, there is no need to set up sub-profit center, and the fixed costs of its sales task decomposition level distributed by the region, statistics, assessment.
Second, select the appropriate profit accounting model
Implementation of regional profit center system, business profit alternative calculation are basically two. One is the use of accounting on the full net profit, the company’s financial department headquarters costs are apportioned according to a certain method to each profit center, the profit is added to each profit center is the company’s financial accounting gross profit. Another sales profit sales when calculating profit assessment area, no cost-sharing to the regional headquarters, just take the sales margins Profit contribution of this region by operating expenses. In contrast, profit taking sales accounting model would be better, to facilitate regional managers to understand, easy to confidential business information companies.
Powers and responsibilities of the various departments of the three regional managers and companies clear
Clear the area manager of general manager role fictitious company, it should be granted permission to operate in certain regional manager the right personnel, the right resources, assessment rights. Meanwhile, the company will also define the powers of the various functional departments of the regional administration, the various functional departments of the regional manager has the power to oversight functions, but companies do not interfere powers of the departments of regional business easily granted in order to protect the autonomy of the regional operations manager . Authority to regional management can focus on marketing center, the Finance Department and the Human Resources Department. Adjusted sales area owned marketing center management, regional resource additions adjusted to balance centralized finance department performance evaluation by a leading corporate human resources and coordination, the final determination rests with the general manager or president.
Fourth, determine the profit and other performance goals of the regional profit center
Reasonably determine the profit regional profit center is the difficulty of implementing a virtual business. Determining business objectives is the result of the game company executives and regional managers, the task of reasonable depends on the executives and sales managers of communication and information exchange. Because executives and sales managers respective positions inconsistent master also asymmetric information, sales managers must carefully prepare the information, but also provide company executives face to face communication opportunities for regional sales manager. Only to get up and down to determine the business objectives approved to implement could truly achieve. Too ambitious, is bound to hurt the business area managers motivated; business goals too low, but also make companies miss opportunities. Regional managers also need to business objectives and resources of the region to below the decomposition city manager, area manager suggestion to form a team to take on this task to ensure that the task decomposition was reasonable and fair, the team is also responsible for the sales manager of jurisdiction performance evaluation.
The implementation of the profit system, it is not only the profit on, but the virtual non-entity into a profit center management, profit is the ultimate goal of its management. Companies can use the comprehensive index system to assess regional manager, design a balanced set of finance, development, customer, learning ability training and other more comprehensive index evaluation system, but the profit target assessment scores should be relatively higher. After all, a profit is the most comprehensive efforts to best reflect the operating performance of the index, the process ultimately reflected in the profits.
Fifth, supporting the development of rewards and penalties
If there is no reward system for security, business performance evaluation will be a mere formality, can not really inspire motivation regional managers and sales staff. Profit center system management style and operational objectives is established, the company should support the development and implementation of reward and punishment system which adapts to safeguard the seriousness of the business objectives. In order to encourage regional manager and business team, companies can consider introducing into incremental profits. To retain good employees, you can also consider taking equity incentive. Profit-sharing recommended differential system, a high proportion of low incremental part is available, more than a certain amount can be fixed into proportion, Specific reference for the industry practices.
Sixth, we must take into account the long-term viability of the region
After the enterprises made a profit center, the regional manager for the task, may reduce investment in the market, to increase profits through cost savings. Such an approach will naturally affect the business continued to grow steadily, even well-known brands also have competing products in accordance with market changes and sales strategy, ongoing maintenance and even devote more resources to maintain market share. In response to this defect, enterprises can to sustain and nurture long-term viability of the regional market through mandatory proportion of the cost of inputs. In determining the investment ratio between the market cost, you can refer to companies in the past historical data, expect the industry standards and business-to-serve specific markets.
In short, the profit center as an effective management of virtualization management, which help enhance corporate and regional manager of integrated management capabilities, facilitate the integrated evaluation of the regional manager of business performance, but also help enterprises to train talents. But companies can not be expected to implement alone profit center operating system to solve all problems, profit center is a tactical means of operating system, can take advantage of in the short run, but it also requires companies in the implementation process be continuously improved and perfected.