Gross Margin Calculation – Why ERP Systems Often Get it Wrong

A gross margin calculation is only as accurate as the cost data behind it. When ERP systems contain incomplete, inconsistent, or outdated cost data, the resulting margin numbers can create a false sense of profitability and lead to reactive pricing decisions. 

Static ERP reporting can make these gaps even harder to see. To understand true margin, businesses need better visibility into variable costs, consistent pricing logic, and the impact of pricing decisions before a sale happens. 

Using Pricing Intelligence to Improve Margin Visibility

Rockton Pricing Management (RPM) is a pricing intelligence platform that helps businesses close the gap between the margins their ERP reports and the margins they actually earn. RPM gives greater visibility into the costs that affect profitability and helps protect margins. With RPM, businesses can: 

• Manage promotional pricing 
• Manage complex distributor pricing 
• Automate rebate calculations in real time 
• Account for variable costs and their impact on margin 
• Gain greater visibility into true margin 

Better pricing visibility means better decisions. Instead of discovering margin problems after the sale, businesses can use Rockton Pricing Management to understand the potential impact of pricing decisions before they happen. 

 You can’t improve margin you can’t see.

Learn more and read the full blog here!