Webinar recap: how Vena supports cost-to-serve analysis

Finance
Apr 22, 2021

What is cost to serve (CTS), why should you embrace it and how does the Vena platform support CTS practices? During the first webinar in our three-part Vena series, our experts zoomed in on the increasingly relevant CTS approach, demonstrating how Vena, with the help of delaware, makes CTS calculations and reporting truly easy.

With companies increasingly looking for ways to optimize profitability while offering exceptional customer service, the cost-to-serve accounting framework is increasingly relevant these days. The concept is pretty simple: instead of calculating the gross margin of products or services by subtracting the cost of goods or services sold from the net sales value, cost to serve calculates the total cost of serving a customer, from lead through to delivery and aftersales.

Cost to serve: why should you care?

“Different customers drive different costs – and the same is true of products and services,” explains Michiel De Meyere, Business Controlling expert, at the start of the webinar. “So, CTS offers interesting new insights into profit margins – as an incentive for optimizations.”

 

With CTS, organizations can, for example, see what product categories are most interesting from a financial point of view and whether these get sufficient marketing attention. They’re able to identify the true value of every customer and understand which customers are really worth investing in. Accordingly, the approach paves the way for short and mid-term improvement tracks: based on CTS reports, firms can define concrete actions, like turn unprofitable products or customers into profitable ones, raise the efficiency of manufacturing or logistics processes or adapt commercial strategies.

About Vena Solutions

Finance departments love Excel. Still, Microsoft’s popular spreadsheet solution does have its financial application limitations, like lack of standards, version control, limited or manual process management and ineffective security.

 

Vena Solutions takes the best of Excel and combines it with a centralized database, workflow, reporting and analytics to connect people, data and systems.

CTS calculations and reporting with Vena

While most ERP systems don’t offer the level of detail required to help organizations determine their cost to serve and leverage it to improve profitability, the Vena platform comprises a series of smart features for cost-to-serve analysis. In the webinar, our experts showed how Vena helps users easily calculate what it truly costs to deliver a good or a service, based on cost drivers and activities. In addition, the Vena environment allows users to generate user-friendly models or reports – in Power BI or in Excel – that bring the data to life, helping everyone involved to make informed decisions.

delaware templates to kickstart your CTS journey

“Vena is a ‘sandbox environment’, meaning it gives businesses the freedom to incorporate their own unique processes, and, hence, develop their own unique modeling. The possibilities are legion, yet it does require a bit of knowledge of business processes and of various existing finance methodologies to set up the environment,” says Ben Reynaert, Business Consulting expert.

“Based on our experience with best-practice CTS solutions, we created templates that contain the most-used formulas, approaches and dimensions for the CTS use case. All users have to do is define the drivers and dimensions they want to include, and then calculate data.”

 

download the webinar recording

Smooth integration and automation

As CTS is a data-intensive process that relies on financial and operational data from a wide range of sources, Vena tools have to work seamlessly together with other systems and data sources, such as the company’s ERP system. “Vena provides a powerful ETL interface that allows you to easily transform and load data from external sources and even automates the process,” Ben continues. That is also explained in the webinar – which is now available for you to view.

Vena webinar series

Did you miss our other Vena webinar series? Don’t worry! You can read the summaries of the ‘budgeting and forecasting’ and ‘ad-hoc simulation’ webinars and download each recording on the blog page.

If you have any further questions, don’t hesitate to reach out to us .

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