The Price, Volume, Mix (Sales Bridge) for SAP Business One otherwise known as the Price, Volume, Mix Analysis, unlocks insights into your variance from budget or from another year’s sales revenue. The Price, Volume, Mix for SAP Business One or PVM, breaks down the total variance into meaningful buckets that indicate what the drivers of the increased or decreased revenue is.
The first component of the variance is the Volume Effect. This indicates how your revenue differed based on overall volume within the company or product line being examined. An overall volume increase will yield a positive change in overall revenue. This correlates to the activity of the company as a whole.
Sometimes when volume has increased, the overall revenue change is still negative. This may be caused by the mix of product which the company is selling. If you switch to selling more high priced products than lower priced ones then the effect will be positive. Conversely, a mix of more lower priced products will have the opposite effect.
The last component of a revenue variance is the price effect. This measure takes into account the planned price of each product versus the actual price of the product. If more discounts were given in a year than planned, then the price effect on revenue may be a decrease. This measurement on the report will let you know how well your salespeople did at holding firm on prices.
Many times salespersons are evaluated only on the amount of revenue they were budgeted or amount of revenue over the prior year that they generated without regard to how that revenue was achieved. The Sales Bridge for SAP Business One allows the sales manager to really manage how sales performance is executed.
To learn more about the Sales Bridge for SAP Business One, check out this post.
NOTE: As a requirement for this stock report, you must create two user-defined fields on the Item Master. Instructions are included with the report.