Drill-down Variance
What causes changes in financial performance?
Once a variance between actual and plan is identified, Finance must drill down into the details to understand what caused it. Knowing what drove changes in revenue and profit provides a more complete picture to help guide your business and improve performance.
With the Drill-down Variance decision area, you can set planning goals and scorecarding metrics for performance management elements such as:
- Profit and sales change ($ and %)
- Volume / price / mix variance ($ and %)
- Average unit cost ($)
- Discount (%)
- GL expense detail ($ and %)
- Net change, price, and sales ($)
- Units sold (#).
You can analyze these goals and metrics by a variety of dimensions to find the hidden gems in the data:
- Customer and Industry
- Fiscal month / year
- GL lines
- Division / department
- Brand and Product line.
Using the Drill-down Variance decision area
You set targets based on your goals and metrics in Drill-down Variance. You monitor your success by looking at how you measure up against your targets. Further, you dive into your results to find out more about these elements driving performance management.
- Sales change ($) : If sales increased by five percent between two time periods, was the cause greater volume, higher price, or a change in the product mix?
- Profit change (%) : If profits increased, was it due to higher cost of goods, a change in product mix to lower margin products, or a reduction in discretionary spending?
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