The wealth of data available through sophisticated IT systems means that businesses can have full visibility of the profits from every product and every customer, indeed from every transaction. Indeed, clients who use business analytics systems to evaluate their profitability for the first time are often surprised at the findings into business areas that they thought they understood completely. It is not uncommon for clients to identify products and customers as actually loss making when the business believed them to be profitable.
Analytics can be utilised in tracking behavioural responses to price volatility to allow businesses to profit maximise when price-setting. Furthermore, businesses can gain insights into behavioural tracking not only of a product in isolation, but of the interaction of the patterns between the same or similar product groups, allowing them to set prices that maximise total profitability.
Fundamental to the ability to profit maximise is the having core data which can be relied upon and the establishment of appropriate allocation methodology in order to allocate costs on the most appropriate basis. This may challenge existing accounting approaches and require a certain amount of process re-engineering in order to enable the circumstances which allow profit improvement. We support clients in critically examining aspects of their accounting processes in order to enable them to maximise their profitability.