Profitability management & Reporting
By creating insight into the correct profitability of individual customers and products, we can ensure that your focus is on the right subjects and steer you towards profitable growth. A clear reporting structure is key to communicate results and enable well-grounded decision making.
Profitability management & Reporting
The first requirement to optimize profitability is a correct allocation of revenue and costs. With our pragmatic approach, we are able to quickly identify the correct cost drivers. Once these allocation parameters are available, we use a bottom-up approach to roll-up cost and revenue to end up with a detailed profitability analysis of all products and customers.
Once the data gathering and allocations are done, a reporting tool can be put in place. With our extensive experience working with different companies, we can help you with designing and implementing the reports and dashboard.
These insights will enable you to do different analysis, such as
Customer differentiation based on their cost-to-serve characteristics (including sales, order entry, transport, packaging, handling costs, ...) offers new insights in the complexity of your value chain. Our experience is that these analysis can result in very unexpected outcomes. The customers which are perceived as "very good" because they generate a lot of revenue, are also often the ones who generate a lot of complexity which stays under the radar without the correct reporting tools.
Detailed cost and profitability insights offer the ability to fundamentally review the product portfolio. The products which are unprofitable and which are not crucial for your profitable customers should maybe be phased out of the product portfolio. The list of phase-out candidates should be carefully reviewed by all stakeholders (sales, marketing, operations, management, ...) before making a final decision.