Understanding Profit Scan: Boosting Profitability in Microsoft Dynamics 365 Business Central

Most distributors face a significant challenge when it comes to managing profit margins. Profit leakage—caused by inefficiencies, over-discounting, and low-margin orders—can quickly erode profitability across thousands of transactions. The cumulative effect of these small losses adds up, ultimately impacting the bottom line.

So how can distributors effectively detect these bad orders at scale and take corrective action before they lose revenue? Cavallo’s Profit Scan provides a powerful answer to this problem by offering Business Central users a way to identify low-margin orders in real-time, giving them the opportunity to make proactive adjustments before money slips away.

The Challenge of Margin Erosion

Distributors often face margin erosion due to a range of factors, including over-discounting, pricing mistakes, or operational inefficiencies that go unnoticed. These errors may seem small on a per-order basis, but they quickly add up across thousands of transactions, leading to substantial profit losses.

Manually identifying which orders are at risk of contributing to margin leakage is not feasible at scale. It can be nearly impossible for distribution teams to review each order and identify those chipping away at profitability before it’s too late. This is where Cavallo’s Profit Scan is a powerful tool for automating the detection and resolution of problematic orders.

What is Profit Scan?

Cavallo’s Profit Scan integrates seamlessly with Microsoft Dynamics 365 Business Central, allowing distributors to monitor and evaluate their orders for potential profit leakage in real time. It helps identify orders with low margins or other issues and highlights them for review, enabling business leaders to take corrective action before processing is completed.

Users receive a clear, data-driven view of every order’s margin status, empowering teams to ensure they meet their profitability targets across all sales documents. It simplifies margin management by automatically scanning and identifying problematic orders based on customizable margin targets.

How Profit Scan Works for Your Order Management Process

Profit Scan operates with precision and flexibility and is designed to fit seamlessly into your existing workflow in Business Central. Here’s how it works:

1. Automatic Detection of Low-Margin Orders: Profit Scan automatically reviews all open orders and quotes, checking each against predefined margin targets. These targets can be set at an overall level or more granularly, such as by specific item groups or classifications.
2. Proactive Review and Action: When an order fails to meet the target margins, Profit Scan flags it and presents it to a business leader for review. This proactive notification system allows for timely decision-making, enabling distributors to address margin issues before the order is processed and completed.
3. Customizable Margin Targets: Each business has unique margin expectations; therefore, one-size-fits-all solutions often fall short. Profit Scan users can define their margin targets based on overall goals or break them down into specific categories. Certain items can be excluded from margin calculations, offering the flexibility to manage complex pricing models.
4. Enhanced Visibility Across Business Central: Profit Scan’s insights don’t just stay within the tool itself. It adds critical margin-related fields throughout Business Central, such as margin gap and status. This provides full visibility of how each individual order stacks up against target margins, allowing for an easy understanding of how each order impacts overall profitability.

Preventing Profit Leakage with Real-Time Insights

By automatically detecting low-margin orders, distributors can prevent revenue loss due to over-discounting or other problems.

For example, if an order comes in and the margin falls below the acceptable threshold, it will be immediately flagged for further action. The responsible business leader can then review the order and decide whether to approve it, adjust pricing, or take another corrective action. This proactive approach ensures that profit-killing orders are caught in real time rather than discovered after the damage has already been done.

Customizable Solutions for Margin Management

Profit Scan is designed to offer flexibility, adapting to the specific needs of your business. Its ability to customize margin targets—whether at the overall level, by item group, or by classification—ensures that you can optimize your approach to profitability across different areas of your product line.

Additionally, it can exclude certain items or subcategories from margin calculations. This ensures that the tool only focuses on the items that matter most to your profitability, providing more targeted insights and avoiding distractions.

These capabilities empower distributors to maintain control over their margins while adjusting to the complexities of their product offerings.

Integrated Solutions: Part of the Order Intelligence Platform

Profit Scan is not just a standalone tool. It is part of our Order Intelligence Platform, which offers next-level functionality for distributors using Business Central. This suite of software solutions is designed to help product-centric brands execute flawless orders, automate critical processes, and maximize profitability across their entire order lifecycle.

Profit Scan’s real-time margin detection works with other platform solutions to provide complete visibility of potential leaks in the order process. Organizations looking for broader protection from profit leakage can extend Profit Scan with Cavallo’s Mission Control, another powerful tool within the Order Intelligence Platform. Mission Control enables the creation of dynamic processes and automated business rules that prevent margin issues from occurring altogether, further safeguarding profitability.

The Value of Profit Scan for Business Central Users

Cavallo’s Profit Scan provides immediate and tangible benefits for distributors using Business Central:

• Proactive Margin Management: By identifying low-margin orders in real-time, Profit Scan helps businesses take action before profit erosion occurs, preventing minor problems from growing into significant financial losses.
• Complete Visibility Across Orders: With enhanced margin visibility across the entire Business Central environment, users better understand how each order impacts their bottom line, ensuring they remain on track to meet profitability goals.
• Customization for Maximum Control: The tool’s flexibility allows businesses to set tailored margin targets, break them down by specific product categories, and exclude irrelevant items, ensuring the system aligns with their unique needs.

Conclusion

Profit Scan is a game-changing solution for distributors who need to manage margins effectively and prevent profit leakage in a fast-paced, high-volume order environment. Integrating seamlessly with Microsoft Dynamics 365 Business Central gives users real-time visibility into low-margin orders and allows them to take immediate corrective action.

For businesses looking to protect their bottom line and optimize profitability, Cavallo’s Profit Scan provides the tools and insights needed to succeed. When combined with other elements of the Order Intelligence Platform, Profit Scan offers a comprehensive approach to order management and profit maximization, ensuring that distributors can thrive in a competitive marketplace. 

You can download Profit Scan for free on Microsoft AppSource.