In our previous Actionable Insights blog, we discussed the Operations Production Andon Board Action Center. Next, we will provide an overview of the Revenue by Entity Action Center as well as the associated key performance indicators (KPIs).
Companies are in business to make money, so keeping a close watch on sales and revenue is one of the most important jobs for management. But with the multi-country, multi-entity, multi-product environment many companies must grapple with, it can be difficult to keep tabs on revenue health. And with changes in sales channels causing shifts in return merchandise authorizations (RMAs), complex global contracts providing discounts that vary by time, location or region, and mass-customization ensuring that almost every product shipped is different, understanding revenue is more complex than ever before.
The Revenue by Entity Action Center provides actionable insight at a glance, so managers can hone in on revenue by entity or period.
KPIs on the Revenue by Entity Action Center
QAD Action Centersprovide analytics to help both managers and users monitor metrics and KPIs. KPI highlights for the Revenue by Entity Action Center include:
Gross Sales by Period by Entity
This visual shows gross sales by period by entity, unadjusted for discounts or returns. This enables managers to analyze the contribution of each entity to the company's overall revenue for a period, and it can also show the effectiveness of local or regional sales programs, the success of new product introductions before global rollouts, and possibly, the need for additional training in a particular entity or region.
Net Sales by Period by Entity
Net sales are the sales after deductions for returns, allowances for missing or damaged goods, and any discounts. Net sales figures are a more accurate picture of the money a company is likely to receive as a result of its sales efforts. This visual allows companies to analyze the effects of local or regional promotions, the impact of poor shipping or material handling procedures that increase returns due to damage or errors, and holidays or political events. Even regional or entity marketing efforts may influence net sales by creating unrealistic expectations in customers' minds, and that can result in high returns that directly affect revenue.
Gross Sales by Entity
By removing the time element of focusing on a specific period, this pie chart shows the gross sales by entity for a given range of periods e.g. year to date, unadjusted by returns or discounts. This information can be vital to decisions about how to allocate resources, including capital equipment, personnel, and distribution centers. Companies may even use it to decide where to locate production for new products or where to open new sales offices.
Net Sales by Entity
Similar to the Net Sales by Period by Entity Action Center, this pie chart shows sales by entity after adjustments for discounts, returns and allowances. It provides a more accurate picture of the money the company can expect to receive from sales as well as a more accurate picture of each entity's contribution to overall revenue. Management may use this Action Center to analyze how to best allocate resources or to decide where they may need to beef up material handling or sales training, or to review the success of regional or entity specific marketing.
The Importance of the Revenue by Entity Action Center
Understanding revenue by entity affects a multitude of management decisions. It can influence decisions about site locations, new product assignments, resource allocations, headcounts and marketing programs, among many other necessary decisions. The best part about these action centers is that it provides a clear picture across the enterprise with currencies translated to a single reporting currency in a single spot for management to begin these analyses. That removes a great deal of subjectivity from decisions like those mentioned, and it helps ensure that the company's resources are allocated appropriately. The quick, clean visibility of the data makes it easy for managers to react decisively without requiring major analysis, while still pointing to entities where more in-depth analysis might be productive.
Many ERP systemsmake it difficult to see this sort of information, hampering the rapid decisions and fast action that modern adaptive companies need to survive. QAD Adaptive ERPprovides the insight immediately so management can adapt to market conditions as they happen.
Which KPIs and metrics are most important to your organization? Learn more about QAD's predefined and highly customizable Action Centersas well as best practices for each.