Better Decisions with Transparent Costing and Profitability Insights

“With companies under pressure to improve profitability, many seek higher levels of transparency into financial performance to uncover insights that can enhance decision-making and create value.”

Business leaders need actionable analytics to recommend actions that improve the bottom line; such as adjusting pricing, reducing product costs, and rationalizing unprofitable products or services. However, many companies rely on two-dimensional reports featuring a significant amount of words and numbers to facilitate a discussion or communicate a point. But in many cases, the information lends itself to more questions, requiring iterative versions to provide the answers.

Read More at The Wall Street Journal >

Leading Consumer Goods Companies Are Mastering Cost Complexity

In today’s fast-moving consumer goods environment, consumers demand an increasing degree of differentiation. Serving this need comes at a cost. Today’s consumers have completely changed the consumer goods environment because their demand is increasing, and businesses have to find a way to keep up if they want to remain competitive and profitable. Many goods come in several variations (size, flavor, ingredients, etc.). Meanwhile, shipping protocols for different countries vary, so the way individual bottles and cans are packaged together will be different depending on where the manufacturer is sending the products. These many variations of SKUs add significantly to production costs for companies that produce fast-moving consumer goods. Businesses have an opportunity to provide significant value by fulfilling customers’ desire for this customization while minimizing the costs.

Read More at The Journal of Accountancy >

Is Activity-Based Costing Worth It?

Manufacturing companies need to understand product costs accurately and in detail. This kind of information is essential for planning operations, pricing, and evaluating business margins. Activity-based costing helps manufacturers identify what products are truly profitable, the true costs of products for pricing, and what activities are driving costs. However, activity-based costing is known for being difficult to apply and labor-intensive due to the extensive data needs of the process. The trick to knowing if activity-based costing is worth the trouble is first finding a tool that can compute accurate product costs and has the capabilities to take the labor and data needs off your hands.

Read More at The Business Case >

Your Legacy Supply Chain Systems Are Costing Your Business More Than You Think

Companies still running on legacy, on-premises supply chain technologies are stuck in that linear model and losing their competitive edge faster than they realize. The supply chain model has transitioned from very supply-driven to an end-to-end process that starts with the customer. The focus is now what the customers want and being agile enough to quickly meet the demand. However, shifting to a new business model requires changes to not only the technology being used, but also to the business processes.

Read More at Forbes Magazine Online >

How Effective is Your Costing?

Many companies are using a costing platform that is more of a “one-size-fits-all” system. What they don’t realize, is that the insights there are getting from these systems are inadequate for important decision making because they aren’t tailored to their specific business needs. Another barrier to effective costing is understanding the difference between the costing done for external financial reporting and managerial costing – costing done purely for an organization’s internal use. The goal of managerial costing is to ensure information for decisions reflects the characteristics of the organization’s resources and operations. Yet most companies have inadequate managerial costing systems, relying on systems designed primarily to meet external financial reporting standards.

Read More at EBN Online >