Using Profitability Analysis to Streamline the Monthly Reporting Process
How can Gross Profit and Net Profit Analysis Reports Drive Faster and Better Decisions?
As CFOs increasingly become key innovators in the Monthly Reporting and Analysis Process, they must rely on modern self-service corporate performance management (CPM) and business intelligence (BI) tools. Using interactive Gross Profit and Net Profit reports like the Profitability Analysis template shown below enables them and users from the FP&A teams and the board to experience near real time monthly actual and budget profitability and P&L reviews that help drive faster and better decisions.
Who uses Profitability Analysis 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 board members with timely and concise Gross Profit and Net Profit Analysis. Companies use key features like the ones below to support their users with effective tools that help drive better profitability and margin insights:
- Gross profit, Operating Income and Net Profit metrics with actual and budget comparisons for monthly and year-to-date data
- Monthly trend charts comparing current year with last year and budget
- Formatted P&L report (below the metrics and charts shown in the screenshot below)
The Profitability Analysis template can be used as a key element of the Monthly Reporting process:
The Profitability Analysis report is a ready-to-use Gross Profit and Net Profit Analysis template from the Solver Marketplace.
A Brief Description of the Profitability Analysis Template
Gross Profit and Net Profit Analysis reports like the one seen in the image above are interactive and parameter driven and often contain sections with charts, variances with indicators, profit & loss summary and account-level detail. One of the important features that aid the user in the analysis process is the ability for the user to detect a variance in the KPIs in the left section of the report and then click on the number to automatically navigate to the P&L located below. From there you can drill from an account balance and down to the underlying GL journal entries. Profitability Analysis reports are often used in conjunction with trended balance sheets, gross margin analysis reports, KPI dashboards.
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
- Templates from Solver that are pre-built and that work out-of-the-box using the Solver CPM cloud. Click here.
- Template examples: You find more than 500 CPM and BI Template examples here.
- Interactive Dashboard examples: Try Power BI dashboard templates from Solver here.
- Software evaluation and selection:
- Vendor Comparison and ROI (free interactive tool)
- Evaluating planning, budgeting and forecasting functionality
- Evaluating Financial Reporting functionality
- Evaluating Dashboard functionality
- Evaluating Data Warehouse functionality to achieve “one version of the truth”
- Demonstrations and other specific assets: Solver Tour Central
- Using third party analysts and consultants to aid in vendor selection
- Creating efficient processes: