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05 Jun

What is Cost Analysis and How Do I Use It?

Evaluating costs against profits is essential, but first, start with clean, reliable data.

To realize increased earnings and lower expenses, professionals rely on effective cost analysis. Weighing costs against profits is the key role of cost analysis, but making it work requires clean data and quality reports – a result of meticulous efforts to gather and organize relevant information.

Some experts think companies can do better.

An organized approach ensures deliverability of relevant business insights and strong comparative reports. It starts with gathering and sorting data and maintaining a narrow focus on the total costs for an organization’s goods and services.

That type of intense tracking and examination of cost patterns enables companies to identify what’s driving higher spending, assess value for what’s spent, and consider alternative materials, supplier, or processes.

A systematic review of expenditures with a direct and indirect effect on goods and services produced is a diligent first step. Once you have this data, you can review costs, revenues and profit margins; and compare and analyze spending by product, location, and across different levels of the business. 

Understanding how your organization generates costs, spends money and where improvements may be found can make all the difference when margins are tight, and competition is intense.

Finance leaders can create more accurate budgets when they can rely on clean data. They can plan better and control cost drivers. Manual processes for gathering data, calculating variances and analyzing comparisons take time and effort that few can afford, and even then they run the risk of delivering incomplete or error-filled results.

The Challenge of Inaccurate Data

As businesses are faced with the challenge of obtaining and aligning data from multiple sources, most do try hard to piece it all together. However, the constant need for more accurate and timely information conflicts with complex and manual cost accounting processes. These methods of allocations, analysis and comparisons typically involve manual and repetitive entries, multiple tabs, and dozens of summary spreadsheets.

Without timely and automated coverage and analysis of each level of the business, the risk of errors runs high. When imperfect and stale data is used in cost budgets and forecasts it does more than results in misaligned budgets — it provides competitors with an advantage. 

What’s the solution?  A solid foundation for analyzing reports to get accurate, timely information to form assumptions.

Conexus SG Provides a Cloud ERP Cost Analysis Solution

When you can automate repetitive tasks such as data collection and reporting in a uniform, consistent application of rules, you are one step closer to a cost analysis solution. Conexus SG recommends NetSuite, a powerful, Cloud ERP accounting software suite dedicated to automation. NetSuite instantly captures, categorizes, calculates, and analyzes transactions with synced data, automated allocations and journal entries, and live dashboards and KPIs. 

Once the accounting database is primed with clean data, it is possible to retrieve critical information in an organized, timely manner, supporting better decisions and allowing time for value-added activities and analysis.

Saved searches and configurable reports simplify analysis, ensuring that current information is automatically displayed and organized by location, product line, and tailored categories.

NetSuite offers robust Cloud ERP functionality and flexibility. This web-based ERP software gives you comprehensive financial and operational management while cutting IT costs and providing greater visibility into your financial results.

Why struggle with sorting data, updating spreadsheets and racing against time? NetSuite, with strategic Cloud ERP performance, provides the precise data capabilities you need for comprehensive cost analysis and automates these procedures, ensuring better control over your decisions and your business.

Conexus SG will help enable your business to be more agile, secure, and dynamic. To do so, we have created a savvy ERP Mapping Tool to help you easily outline your company’s essential competencies and procedures. This will guide you to zero in on the unique facets of your business to solve specific operational needs. Choosing the best Cloud ERP software solution will set you on a path of enhanced optimization that will impact your business at all levels. Every solution that Conexus SG offers is an opportunity for you to maximize your value. Download the Conexus SG ERP Mapping Tool today and let’s begin the journey whenever you’re ready.

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