- February 7, 2022
- Posted by: John
- Category: Tech Solutions
Here at Tekulus, we provide corporate efficiency analysis services for companies of all sizes. While running these analyses, we help many of our clients to learn more about their company. Learning more about your company is beneficial for a number of reasons, but today we want to talk about five of them.
Corporate Efficiency Analysis: 5 Things You Can Learn About Your Company
1. How Your Company is Performing Compared to Last Year
One of the benefits of running a corporate efficiency analysis annually is that you can compare your data from this year with your data from last year. In this comparison you can see how your company fared in comparison to last year and if there are any areas of considerable change for your company in terms of profits and losses. By analyzing this data, you can determine whether your business has been affected by external factors that influence profits or if internal factors have cost you and need to be addressed before they affect the coming year as well.
2. Changes in Material Costs
When your business has a large catalog of products, it can be easy to lose track of material expenses. If your expenses have been creeping up without you noticing, an annual efficiency analysis is the perfect way to find out exactly what materials are driving your expenses up. Find out where all those nickel and dime expenses come from and start tracking down new suppliers who can offer you a better price on the materials you need.
3. Measure How Much Material Changes Have Influenced Your Bottom Line
If you have recently switched suppliers to save money on materials that you buy frequently and want to see just how much you are saving, an efficiency analysis is a great place to start. Look at how much you are saving by sourcing new materials and find out if the savings you are gaining by saving on new materials are worth the change. For example, if you are saving on new material supplies, but your products are of lesser quality so you are selling fewer products, you can flag that change and revert back to your original supplier ASAP.
4. Find Out If Your Markup Margin Is High Enough
To make your business stand out, you may decide to cut down on the profit margin and lower your product prices. When business is bad or times are tough, however, inexperienced business owners may focus on stealing sales from competitors rather than getting their profit margin just right. When this pricing faux pas happens, these businesses quickly find themselves bleeding cash and facing bankruptcy. A corporate efficiency analysis can identify this type of problem before it runs the business into the ground. The sooner you can identify your low profit margin products, the faster you can correct your mistake and increase profit margins.
5. Identifying Problems With Accounts Receivable
Accounts receivable – or the money owed to your company by customers – follow different payment agreement structures depending on your business, the quantity of product involved, and the customer in question. Occasionally, however, accounts receivable slip under the radar or deadlines get extended due to special circumstances. When this type of event happens, the entire accounting system can get thrown out of balance and when this type of thing happens repeatedly, it can take a real toll on the overall integrity of the company.
A corporate efficiency analysis can quickly identify errors and slowdowns in the accounts receivable system that need to be addressed. Having pinpointed accounts receivable as being a significant source of lost money, you now have the opportunity to ramp up collections efforts and nudge customers with past due accounts to settle their past due balances. Once settled, the infusion of cash into the business can be used to boost company and accounts receivable can implement a stricter collections policy so that the company does not have to face similar losses again in the near future!
Are You Interested in a Corporate Efficiency Analysis?
Are you interested in what you can learn from a corporate efficiency analysis? Our staff here at Tekulus can help! To get started on your unique efficiency analysis call our team today at 510-592-8530!