AD Singleton & Co, CPA, Inc.'s Watch Your Wallet! A newsletter for clients and friends. February 2009 | Published by ADSCPA A collection of practical tax and financial tips, articles, and resources targeted to help you watch your wallet and keep what you earn. Subscribe

It's vital, these days, to make sure you're getting the most out of on-premises sales staff. If goals are being met and revenue is where you want it to be, you may not need to use any measuring devices.

But if there is a problem, the following ratios, if applicable to your particular business, may help you pinpoint the problem, analyze it, and take action. The ratios can be applied to your entire business, to a division or department, or to one employee. Progress can be measured by comparing numbers from one month to the next.

Ratio 1: Total sales compensation ÷ gross sales = direct selling costs (%).

Ratio 2: Gross sales ÷ total hours worked by salespeople = sales dollars per hour.

Ratio 3: Number of sales ÷ number of full-time-equivalent sales people = number of sales per salesperson.

Ratio 4: Gross sales ÷ number of full-time-equivalent sales people = sales dollars per salesperson.

Ratio 5: Gross sales ÷ number of sales transactions = average sales dollars per transaction.

Tip: The numbers you get from these ratios might also be used to develop sales quotas or targets.

Tip: Companies hire us to help them get these measurements quickly and make them meaningful to their operations. Give us a call if you're interested.