The idea of quoting is simple- Sales teams provide their customers or prospects with a quote based on information produced by a neutral view of costs and the markup necessary to achieve their target profit margins. However, this process is not as straight forward as it sounds. There are many different reasons why quoting can become complex- sales people pursuing commissions and bonuses; accountants applying rigid standard costs and incomprehensible overhead; and manufacturing stuck with getting the job done and somehow taking the blame if it isn’t profitable. So how can improvements be made?
“Adopting an advanced managerial costing system can achieve these quoting objectives, and provide great insights into product, customer and channel profitability, which can be then used to develop new competitive strategies.” -Larry White, Resource Consumption Accounting Institute