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What is the best rule of thumb for Quarter End cut-off for final sales orders?

Sales often demands 11th hour orders and the demands for revenue and compensation are compelling, but requires Operations resource staffing spikes (and kills the staff as well!). What's the best line in the sand for Order Mgmt?

Answers

Lyle Newkirk
Title: CFO
Company: Corrigo Incorporated
(CFO, Corrigo Incorporated) |

If you are getting revenue - do what you need to do to support it. There are lots of companies that will gladly take some turmoil to move the top line along. You should be sitting down with the sales people in the nonpeak times to figure out how better to manage the peak times. But never give a salesperson a reason for not making their numbers.

Jack Judd
Title: Retired
Company: Retired
(Retired, Retired) |

You may want to create a system for compensating sales people for orders or bookings versus shipped sales. This may relieve the issues you have regarding being open late.

If you are a public company and are getting pressure to get every last dollar of revenue, have a talk with your boss about the additional costs incurred to run a company this way. I think companies run best when reasonable rules and processes are created and followed.

Topic Expert
Karoline Mello
Title: Director, FP&A
Company: Apollo Group
(Director, FP&A, Apollo Group) |

I would recommend using GAAP and contracts to govern this. Your contracts with the customers should be written to specify when the materials shipped to the customer become their property and ceases to be yours. If you receive and do not ship an 11th hour order, you count the inventory and not the revenue. When it ships you count the revenue.
My company provides services and products. Services, if beginning on the last day of the month, can be counted for revenue and sales commissions. Products are guaranteed to ship if the order is placed prior to noon the last day of the month. If we can accommodate last minute orders we will, if we cannot they are shipped on the first business day of the next month and revenue and sales commissions are recording in the month of shipment.

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