Do you know …

that between 20% and 40% of customers are not profitable for organizations? which products generate profits and which generate losses for companies? which customers add value to your organization and those who destroy? … what service level should be given to each client to ensure sales and profitability? how to differentiate prices between customers, regions, distribution channels? how to allocate indirect costs accurately among the areas that consume them?

In what stage is your costing system? Does it allow you to easily get the costing of productscustomers, distribution channels, brands or sales regions The YouTube ID of Insert video URL or ID here is invalid. The YouTube ID of Insert video URL or ID here is invalid. ?

Organizations that does not know cost of their products or services and the profitability or loss that generates each client, brand, distribution channel or sales region, face serious disadvantages in today’s competitive environment.

 

Profitability Analysis

Profitability Analysis has taken great importance due to: 1. To know which products are profitable and which generate losses. 2. Identify customers which add value and those who destroy it. 3. Acure assignment of resources by business segment. 4. Identify profitable product portfolio by channel or customer. 5. Establish a pricing strategy by customer or markets. 6. Assignment of expenses (Shared Services) to business units or areas of a corporate group. 7. Assignmet of Cost To Serve based on sales and profitability of customers. 8. Budgeting based on “operations” rather than accounting” approach.

Implement an Activity-Based Costing System to:

  • Identify areas to reduce costs
  • Increase your profits
  • Improve your procesess
  • Improve your decision making process