Turn ERP records into dependable analysis of sales, margin and customers without creating another set of inconsistent reports.
Records need context before they support decisions
Invoices, inventory and customer records can work correctly while the owner waits days to understand a margin decline. Another system may not be the answer. Shared definitions, linked data and clear quality ownership are often missing. Begin with one business question: which changes in customers and products explain the deterioration over the last quarter?
Define what the company calls a sale
An order, issued invoice, dispatched product and received payment are different events. Each answers a different question. A sales report should specify when revenue is recognised, how adjustments are handled and whether values are net or gross. Agree the rules with finance. Otherwise sales and accounting can both have correct figures that cannot meaningfully be compared.
Connect customers and products across systems
One customer may appear under several names, while a product acquires a new code after a packaging change. ERP, CRM and store exports cannot reliably be joined using names alone. They need stable identifiers and explicit mapping rules. Retain change history and a list of unresolved records. Unchecked automatic matching can hide a major customer's decline or artificially double its turnover.
Revenue and margin imply different decisions
In a simplified example, a product earns 100 in net revenue and costs 60. Contribution before further costs is 40, margin is 40% and markup approximately 66.7%. A discount that reduces revenue to 90 leaves 30 before further costs. The amount of margin falls 25% even though price falls 10%. The report must clearly state which costs are included in its margin definition.
Returns, adjustments and timing change the picture
If a return occurs the next month, a document-based report and profitability analysis of the original sale can produce different results. Both views can be useful if clearly labelled. Late purchase costs, annual rebates and changes in salesperson assignment create similar issues. Define refresh and period-closing rules. Otherwise the figures in a presentation depend on the day someone downloaded the spreadsheet.
The first dashboard should help explain causes
Start with revenue, units, margin and active customers. Add a comparison with an equivalent period and a path down to the customer, product and document. Separate the effects of price, quantity and product mix where the data supports it. A red downward arrow is insufficient. The decision-maker needs to identify a lost customer, lower buying frequency or higher procurement costs.
Automate after the numbers are reconciled
Validate one period against an agreed sample of documents. Reconcile totals with the ERP, inspect adjustments and identify unexplained differences. Assign ownership of definitions, a refresh schedule and a process for missing data. The first useful outcome may be answering management's question faster rather than producing an elaborate visual. Once the figures are dependable, acquisition costs and marketing profitability can be added.
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- Business first, marketing second: an interview with Marcel Bańkowski
FAQ
Does the ERP need replacing?
Not necessarily. Check definitions, data access, identifiers and report joins first. The problem may be in the analytical layer.
Is product margin the company's profit?
No. It depends on the costs included. Distinguish product margin from the result after logistics, service, marketing and fixed costs.