Company description
This solution shows how Koabo can work in a pharmaceutical company with a presence in two central European countries. The company is part of a global pharmaceutical entity, but this solution applies only to its central European part.
The company in question is not producing the pharmaceuticals. It is only selling them to major customers, such as big pharmacy chains and hospitals. Its portfolio contains mostly over the counter medications, which have a low price and low margin and can be considered FMCG.
Company needs
The financial controlling department in the company is struggling with managing all the tasks that are assigned to it. There are 1400 products, divided into 5 major business units, and these are then divided into more than 40 brands. Each business unit has its business unit manager, and there are multiple sales representatives assigned to each brand.
Every product has varied levels of discounts that are provided to each customer. The discounts can range from 5% to 90% of the selling price, so understanding discounts is crucial in understanding the financial performance of the company. Since each customer can have different discounts for each product and each month, the complexity of planning and reporting is enormous and is far beyond from what can be done in Excel.
The financial controlling department needs to deliver every month to the managers of each business unit and brand its profit and loss statements. The company is performing quarterly updates of its financial plan, and business unit managers and brand managers are involved in this planning process.
The main needs of the company are:
- Improve reporting to managers
- Improve the speed of report preparation
- Get a better understanding of discounts provided to customers
- Streamline planning process
- Increase efficiency in the financial controlling department
Solution with Koabo
Monthly reporting
Koabo is directly connected to the company’s ERP, so data is imported automatically. The financial controller then must log into Koabo and make sure that new products are correctly mapped into brands and that they have all their reporting parameters updated.
Profit and loss reports for each business unit are generated automatically without the involvement of the financial controlling. Since the company insists on not using cloud-based visualization tools, Excel reports are used to present profit and loss to each manager. These reports are automatically updated after managers open them, and they automatically change their contents based on the user rights of the person opening them.
Each product is analyzed through two segmentations – corporate headquarters use one, and one is used locally.
Advanced analysis
- Detailed analysis of the profitability of each product
- Profitability per each customer
- Price volume analysis of each product
- Automatic comparison of scenarios
The company needs a detailed analysis of the profitability of each product. This analysis needs to have more in-depth details, such as showing profitability per each customer because discounts for customers have a significant impact on the overall profitability of the product.
Price volume analysis of each product is also needed, and Koabo can provide it together with the rest of the reports. Price volume analysis is automatically calculated for differences between the actual scenario and last year, budget, and forecast.
A big part of the analytical work of the financial controlling department is a comparison of scenarios. Koabo automatically provides this analysis, including the deepest level of detail possible. It then generates waterfall charts that explain the differences at first sight.
Quarterly plan updates
The company is performing quarterly forecast updates. Within this process, the annual budget is prepared as well.
Each brand manager is involved in this process. Their task is to plan the profitability of each of their products, and they also have to plan the overhead costs of their departments. These overheads are then allocated to each brand.
Since the discounts are too complex to plan by hand, brand managers only have to prepare discount percentages per customer. These are then entered into custom made calculation in Koabo, which generates detailed gross profit calculation for the whole company.
- Increase the efficiency of the whole process
- A better understanding of the data
- Reduce mistakes caused by having multiple versions of Excel files
- Automatic forecast of gross profit per product
- Automatic calculation of allocations of overheads
Submitting data to corporate headquarters
The company needs to submit every month full set of data per each brand through a reporting system of corporate headquarters.
Koabo is set up to calculate a report according to the requirements of the corporate headquarters, so the task of importing data is only about copying the calculated dataset and pasting it into the different data entry form.
