How can Profitability Analysis Drive Faster and Better Decisions?

As CFOs increasingly become key advisors in the Monthly Reporting Process, they must rely on modern self-service corporate performance management (CPM) and business intelligence (BI) tools. Using interactive Profitability Reports like the Gross Margin (GM) Analysis with Benchmarking Across Subsidiaries template shown below enables them and users from the FP&A teams and executives to experience near real time understanding of revenues, costs of sales and gross profit that help drive faster and better decisions.

Who uses Gross Margin with Cross-Subsidiary Benchmarking Reports and What are Some Key Analytical Features?

In today’s fast-paced business environment, CFOs are under high pressure to supply end users like executives and financial analysts with timely and concise Profitability Analysis. Companies use key features like the ones below to support their users with effective analysis that helps drive better focus on under- and over-performing locations:

  • Chart with comparison of each subsidiary’s GM to the average of all selected locations
  • Report section with gross margin per location and drill down to the underlying drivers (revenue and cost of sales)
  • Variance analysis with traffic lights to highlight monthly and year-to-date (YTD) variance of actuals versus budget and last year

The Gross Margin Analysis with Benchmarking Across Subsidiaries template can be used as a key element of the Monthly Reporting process:

Example of a Gross Margin Analysis Report with Benchmarking Across Subsidiaries to Streamline the Monthly Reporting Process

Example of a Gross Margin Analysis Report with Benchmarking Across Subsidiaries to Streamline the Monthly Reporting Process

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(screenshot picture name for Google) ->  The Gross Margin Analysis Report with Benchmarking Across Subsidiaries is a ready-to-use Profitability Analysis Template from the Solver Marketplace.

A Brief Description of the Gross Margin Analysis with Benchmarking Across Subsidiaries Template

Profitability Analysis like the one seen in the image above are interactive and parameter driven and typically contain sections with metrics and charts that compare each location’s gross margin to the benchmark average. One of the important features that aid the user in the analysis process is the ability to visually see a side-by-side comparison of GM per location and versus the average. Gross Margin Analysis with Benchmarking Across Subsidiaries reports are often used in conjunction with profit & loss reports, variance and trend reports, gross margin dashboards, KPI dashboards, gross margin dashboards, budget and forecast input forms.

Data Integration to Transaction Systems

Most organizations these days want automated and streamlined planning, reporting and analysis. However, many of the benefits described earlier rely on best of breed Corporate Performance Management (CPM) tools and/or Business Intelligence (BI) capabilities as well as data marts or data warehouses that use pre-built integrations to the organization’s ERP system. Oftentimes, they also need integrations to other key data sources like CRM, subscription systems, payroll tools, etc.

Modern, cloud-based ERPs like Microsoft Dynamics 365 Finance (D365 Finance), Microsoft Dynamics 365 Business Central (D365 BC), Sage Intacct, Acumatica, Netsuite and SAP have robust APIs which allow for dynamic integrations to CPM and BI tools that are fully automated and flexible to run on a schedule or on-demand.

Additional Resources to Aid with Research of Templates, CPM and BI Tools