The Ledger

Best Practices to Drive Cash Flow Back Into Your Business

One struggle that organizations continually face as they strive to remain competitive is reducing direct and indirect costs. While many are successful in driving down direct costs, long-held beliefs relating to the interactions between buyers and suppliers often make reductions in indirect costs a greater challenge. These supply chain misconceptions become obstacles to achieving indirect cost reduction and improved profitability. In order to achieve best practices, organizations must understand the misconceptions inherent in their procurement processes and combine that with an understanding of the supplier’s industry.

Read More at Strategic Finance Magazine >

An Alternative Approach to Costing

Many companies do not know where they are making or losing money. They know their overall costs and profits made, but can’t see their costs at a more granular and actionable level, or their profitability by product. In today’s complex businesses, massive cross-subsidizations mask the true cost and profit of products, customers, market segments, and activities. As a result, business leaders don’t truly believe the standard cost and profit figures that their accounting or finance departments provide. Square root costing is being embraced by CFOs because it is a practical methodology for correcting the cross-subsidizations that have plagued standard costing.

Read More at CFO Magazine >

Machine Learning is Filling the Gap Between Procurement and Supply Chain Management

 “The supply chain is an integral part of business operations, and it drives tremendous competitive advantage. Its speed and agility come from quickly picking up subtle changes in demand and supply and adapting to those shifts to keep business humming along without disruption.”

However, very few companies have figured out how to synchronize their procurement sector with their supply chain. Dysfunctional behaviors across the procurement-supply chain relationship are introducing undesirable outcomes such as supply shortages, excess in slow-moving inventory, noncompetitive pricing, and delivery delays. There are five machine learning-enabled use cases that can bring the two organizations work in unison.

Read More at The Digitalist by SAP >

Key Points for Effective Business Forecasting

It is human nature to be curious about the unknown and it is this curiosity that drives business leaders to do everything they can to predict the future. This need for businesses to anticipate the future has given rise to advanced analytics departments and predictive tools that utilize massive amounts of data and identify ways to improve business operations. Business forecasting is essential for corporate planning, growth, and competitive advantage. It helps with estimating sales, expenditures, and most importantly, margins. There are four key points to keep in mind when leveraging forecasting for making strategic business decisions.

Read More at The Digitalist by SAP >