Block · Profitability
Customer profitability on your ERP: what makes you money and what does not
What makes you money, and what takes it.
Billing a lot with a customer does not mean making money with them. Between discounts, payment terms, the variable cost of serving them and product mix, there are large accounts you actually serve at a loss and small accounts that hold up the margin. The problem is that this analysis lives in spreadsheets someone builds every now and then, and by the time it reaches the decision table it is an old snapshot.
The nBlock Profitability block calculates the true margin by customer, SKU and rep from your ERP data, without loading anything new. It shows which accounts are at a loss, which products carry the business and where to win back margin points. That way your sales and finance teams decide prices, terms and priorities with current numbers, not hunches.
Challenge
You do not know which customers, SKUs or reps make you money and which take it away.
Solution
Real margin by customer, SKU and rep on your ERP data, with the loss-making accounts already flagged.
Impact
You recover margin points and cut the accounts you work at a loss.
- Margin by customer / SKU / rep
- Loss-making accounts surfaced
- A profitable product mix
How it works on your ERP
- Step 1
Reads sales and costs from the ERP
It takes invoices, credit notes, costs and discounts by customer and product from your ERP. The ERP stays the source of truth and there are no parallel spreadsheets to build.
- Step 2
Calculates the true margin
It crosses revenue with cost of goods sold and variable costs to reach the contribution margin by customer, SKU and rep, not just the gross margin on the invoice.
- Step 3
Flags critical accounts and products
It ranks the customer book by margin, flags the accounts you serve at a loss and shows which products, within each customer, lift or sink profitability.
- Step 4
Points to where margin can be won back
It shows where it pays to renegotiate terms, which mix to push in each account and which discounts are not justified, so the team acts on the numbers instead of just looking at them.
Where it is used
Renegotiating with accounts at a loss
Go into the negotiation with that customer’s real contribution margin and adjust prices, discounts or payment terms with arguments, instead of cutting them off blindly.
Reviewing discounts before a promotion
Before offering a broad discount to a segment, see how much margin each customer and each product leaves, so you do not give away points where there is no need.
Measuring each rep’s book
Compare reps by the margin they generate and not just by what they bill, to steer sales effort toward the accounts and products that make money.
Frequently asked questions
What is the difference between gross margin and contribution margin per customer?
Gross margin subtracts the cost of goods sold from revenue. Contribution margin goes one step further and deducts the variable costs attributable to each customer or product. It is the one that shows how much each account really contributes to covering fixed costs, and the one that exposes customers who bill a lot but leave little.
What do I do when I find a customer I serve at a loss?
The answer is not always to cut them off. First it helps to understand why they lose money: accumulated discounts, long payment terms or a mix loaded with low-margin products. With that in view you can renegotiate terms, push more profitable products in that account or, if there is no workable fix, stop prioritizing it.
Where does the data come from?
From the ERP you already use: sales, costs, discounts and credit notes by customer, product and rep. It does not replace your system or ask you to load anything by hand. That said, the quality of the result depends on the quality of the data: the better your ERP reflects real costs and discounts, the more precise the margin.
How long does it take to be up and running?
Results show up in weeks. Because the block works on the data already in your ERP, there is no migration or long systems project. It is contracted as a service, per block, and can be combined with others, like Collections, to see which customers finance your operation and which ones strain it.
Other blocks
- Sales intelligenceYour whole sales force, made smart.
- Route planningEvery rep’s week, planned.
- Order takingZero manual order entry.
- Customer serviceEvery customer message, answered instantly.
- Purchase planningBuy what sells, without stockouts.
- Automated collectionsThe money you already earned, collected on time.
- Automatic reconciliationTwo data sources, aligned on their own.
Next step
Shall we look at it on your own data?
In half an hour we show you how the profitability block runs on your ERP and what changes in your operation.