I worked with a company that waited until the books closed to determine whether they were profitable that month. When I asked about profits by product and customer, I got a blank stare.
It doesn't have to be complicated initially but it's one of the most valuable analytics you can perform.
Some products may generate a lot of revenue but their expenses offset and cause very little profit. Discounting only exacerbates the problem.
Same for customers. Higher profile customers can also consume much more time, effort, and discounts that ultimately consume profits.
Whether you're discounting, providing volume pricing, or any other form of lower price, make sure you understand your profitability by product, customer, and projects.
Rich Hall Group