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There is no useful sale without profitability (ENGLISH) - Servicios de Interim Management - Interim Managers de primer nivel
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There is no useful sale without profitability (ENGLISH)

There is no useful sale without profitability (ENGLISH)

THERE IS NO USEFUL SALE WITHOUT PROFITABILITY

As our commercial ancestors used to put it, a sale is never complete until the invoice is properly settled. Today’s Darwinian and highly competitive business environment makes obtaining significant distribution for our products and building relevant consumer differentiation harder than ever, and we can safely say that there is never a useful sale unless there is profitability.

Establishing an account-based profit and loss reporting system has become essential for a company’s future survival and competitiveness.

  • In the short term, staggering improvements in profitability may be achieved: correcting sales that deliver negative gross margin, proactive management of the product mix, and the “cure or kill” approach to unsustainable situations are usually the key.
  • It also increases the focus of our staff on non-commercial aspects of the profitability of our business: returns, number of deliveries, urgent deliveries, payment terms…
  • In the long term, it implies a cultural change in the commercial organization, and a broadening of the focus of negotiations, increasing the existing options to reach an agreement with the client.
  • Improved gross margins provide an indication of a company’s competitiveness and success, as they will provide the business with the needed fuel for innovation and investing in both the business itself as well as physical assets, etc.
  • Un esfuerzo formativo, para su correcta comprensión y aplicación por la organización comercial.
  • El establecimiento de un sistema de planificación anual del negocio de grandes cuentas.

Despite bringing so many benefits, establishing an account-based profit and loss reporting system is never easy. It requires:

  • High-quality work by the Finance Department, in close collaboration with the Commercial operation and with the support of Production, Logistics, and even our external logistical partners
  • A sustained effort in training, to ensure it is correctly understood and applied by the entire Commercial organization.
  • Establishing an annual planning system for key accounts.

Make no mistake, P&L accounts, useful as they are, can never be a substitute for basic business sense: we must understand each product’s contribution to overall profitability and the relationship with the client, and we must weigh the short-term and long-term aspects of building our business.

At Interim Talentia we have hands-on experience in the correct implementation of account-based profit and loss reporting systems. We have consistently achieved significant results in companies belonging to different sectors and of different sizes.

We offer mid-sized companies our “know-how”, built by implementing similar projects. This “know -how” that is especially applicable to cases such as these, as our “Interim Team Management”® concept allows our Project Leader to always count not only on the support of a Project Director, but also on the necessary inputs from functional experts from each and every one of the different functions whose contribution is essential for the successful implementation of the system.

We would be delighted to know your situation and to explain how we could work jointly with you to improve it.

 

Francisco Lloreda
Talento Asociado – Dirección Comercial