Chuck's Reporting Corner February 2009

A new widget for Business Analysis ES.

On February 11, 2009 the Intuit Mid Market Group released an insightful tool that easily gives a business insight into the strength and buying power of its customers, as well as their contribution to the bottom line. In other words - find out who your best customers are, and base it upon multiple factors/variables:

Sales Dollars
Gross Margin on the items sold to that customer
Gross Margin % on the items sold to that customer
Payment Promptness

Over the years, I have found that most business owners *know* their business, i.e. they generally know who are their largest customers in terms of sales dollars; but they might be a little harder pressed to tell you how the sales volume of these customers contribute to the bottom line, or affect cash flow.

There are business growth stages that may affect our decisions in terms of which customers we go after - or which ones we want to keep. For many of us, the initial phase involves what I call "groveling" for business, as we endeavored to get our business off of the ground, and create some testimony to the work we do.

However, as the business matures, we may find that there are certain types of customers we don't want, as their business may negatively affect our bottom line or general well being. There is quite a bit of literature that promotes the "firing" of customers who do not contribute to the bottom line. I must admit, that I am in that camp, but that is a conversation for another day.

Customer analysis at your fingertips.

Before I show you the details of this new tool, I would be remiss if I did not discuss the most obvious thing that comes to mind when viewing the data: No cutting, no pasting, no creating mounds and mounds of formulas, no hair pulling, etc .etc. It is already done for you.

As you will see in the following pictures, it is as easy as entering a date range, choosing a variable, then - and to steal from the movie title - "Analyze This!"

(As a reminder, Business Analysis ES is a free offering for Enterprise customers, and is also available to those customers who had signed up for beta testing last month).

The Tool: Sales Performance Analyzer

After you login to Business Analysis ES, you will see a new icon:

Double clicking on this takes you to the default page:

You will notice three choices on the left hand side:

1. A date range filter
2. The ability to pick which variable you want to explore (Sales, Profit Margin, Profit Margin %, Payment Promptness - or "ALL" variables)
3. The base upon which you want to apply the variables to (Item or Customer)

Here we change the variable.

Changing the variable to Gross Margin displays:

(Notice in this example, we must have some customers who are draining customer profits)

Changing the variable to Gross Margin % shows:

And the fourth variable "Payment Promptness" displays:

(The numbers at the bottom represent ranking - not number of days paid. There is a complex formula used to "scale" this variable, so it can be weighted and used in conjunction with the other variables.)

Finally, we can use all four variables to come up with a weighted average - based upon how important we deem that particular variable to be in our own business.

We have four choices for each variable:

Very Important
Important
Not Important
Do Not Include

After assigning the importance to each variable, we get a final ranking of the top 30 customers ranked from 1 to 100.

Notice the difference in this report and the report that displayed for Payment Promptness .e.g. Pretell Real Estate was ranked 4th in Payment Promptness, but 1st in overall Sales Performance.

The Ability to Drill Down.

The mathematical model used to properly weigh each variable in the Sales Performance Analyzer is beyond the scope of this article, but we can show you the data behind the scenes. This is one of the great strengths of the Business Objects Web Intelligence tools which are at the heart of this technological offering.

If we return to the Initial screen there is a Drill Down Link:

Clicking on that link takes us to the details:

There are four "worksheets" represented by tabs at the bottom that contain ALL of the data behind the scenes for each variable:

Sales
Gross Margin (For both Margin $ and Margin %)
Payment Promptness

For example, here is the Payment Promptness Data Worksheet:

(Excuse the "Chuck Castle 1"; my Intuit teammates in Orem - Richard, Lynn, Kristine, Brad, Burton, Jeff, Jason, Hank - knick named our Quality Test file in my honor; what a group!).

Analyze Further.

If you read my article in the December, 2008 newsletter you might remember that I displayed the plethora of Business Tools to further slice and dice your data. Even though your worksheets contain the behind the scenes data, you can use any one of them as a starting point to dig further - or add other objects to create new reports.

Just click on the "Switch to Analysis View" to expose the tools:

Analysis View Screen (and other available objects on the left hand side):

Summary

As most of us know, who have worked with QuickBooks over the years, doing even the simplest data analysis required Excel exporting, data manipulation, re-exporting; or the use of the QODBC driver and Crystal Reports; or some other complicated data extraction mechanism. Not to mention a ton of patience on our part - and clients who were willing to spend the money for our time to get it done.

95% of all business fail in the first 5 years; and research has shown that one of the contributors is lack of up to date information with which to make informed decisions about the business.

Kudos to Richard Tripp of the Mid Market Group and his staff in Orem, Utah - and our fellow engineering teams in Mountain View - for providing us with an easy to use tool, that alleviates the complexity and pain we have endured for many years when attempting to deliver relevant analysis to our clients.

Keep it coming boys and girls!

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