Segmentation is focus of limited resources. It is not an absolute science but when done several times it becomes an art and with that a key factor. Selecting your customers that are win-win and managing the non-contributors can be done in many ways. OnCompass uses a three dimension method to ensure your organisation focuses on the right customers.
Crucial in understanding global profits is a simple IUP (Inter unit pricing) between entities that is first of all tax compliant in all regions but secondly minimises duties paid and corporation tax. Of course the structure and proces need to be applied consistently across regions/sites. There are several approaches for IUP and OnCompass can support in the selection, setup and implementation.
Having the optimum balance between commercial interests and the financial consequences (credit risk and working capital) is the starting point for maximizing the total business results. Having a credit policy, which contains best practices from all regions and functions, allow all involved parties to work via consistent rules to the best result for the total company and reducing risk. A credit policy should improve protecting assets, limiting the risk of sales not cashed, decreasing financing cost for the company and improve the cash flow. OnCompass can support your credit management by setting up a credit policy.
Pricing opportunities in companies are not always visible. Set up a consistent transaction database on customer pocket margin is the starting point. Analyze the pocket margin and identify main margin leakages and estimate costs for fixing these. It will immediately improve pricing and more important margin. It will also harmonize existing pricing initiatives. OnCompass can support you in setting up such an analysis to manage transactions in a more disciplined way to reduce low margin and increase high margin transactions.