The Ledger

The Rule of Finance Transformation: No Pain, No Gain

It is clear to many business leaders that in order to remain competitive in today’s business climate, they must increase their economic value by re-evaluating their strategy, business model, and financial operations. Business transformations are all about trying to change the way you do business whether on a global, enterprise-wide scale or one that’s more limited. With any kind of transformation, there will be a significant learning curve for the entire organization. Whether because of competitive pressures, technology, new regulatory requirements, or other changes, many organizations must initiate costly, painful transformations. However, with the right approach, it will be worth it.

Read More at Strategic Finance Magazine >

Bottom-Up Forecasting Can Enhance Your Top-Line Predictions

Financial projections are a fundamental component of the business plan and are important for many reasons. When it comes to developing financial projections, there are two options: top-down and bottom up. The more strategic option is bottom up forecasting, which is where the sales revenue estimates of each product or product line are combined to gauge revenue estimates for the entire firm. This method is seen as a strategic option because it is an approach where finance leaders can take a real look at their current situation and capabilities, and they are able to see where the business can reasonably go. Top-down forecasting can be a big gamble, especially for start-up companies.

Read More at Forbes Magazine >

Why You Need a “Last-Mile” Data Management Solution

“When it comes to operationalizing customer lifecycle processes supported by enterprise software, many organizations struggle to meet the unique needs of different business units. A centralized, one-size-fits-all approach doesn’t cut it, and individual groups increasingly need to augment core system data to meet specific customer needs.”

When this happens, users typically resort to spreadsheets. But spreadsheet-based processes are far from scalable. They’re insecure, inconsistent, and ill-suited for complex data structures. They take data outside of the core system and make reporting difficult if not impossible.

The solution: fully integrated, end-to-end visibility software.

Read More at The Digitalist by SAP >

Redefining the Profitability Recipe For Food And Beverage Companies

Many food and beverage companies focus on customer relationships because they generate more sales, but they don’t take the next step of looking at what profits are generated by that customer. These companies often focus on gross profit, but the problem with gross profit is that cost of goods sold often includes fixed expenses -which don’t change incrementally with sales. Because of the distortion caused by fixed expenses, companies often make poor profitability decisions using a gross profit percentage. Therefore, utilizing contribution margin is the preferable method in analyzing profitability of a customer, product or distribution channel. Analyzing the contribution margin of each customer or product is essential to overall profitability.

Read More at Forbes Magazine >