Like the operating expenses by period, this visual compares budget and actual variance for analysis. If operating expenses are lower than budget, the company may be pricing themselves out of a market, or perhaps simply enjoying an unexpected surge in margins. If operating expenses are exceeding budgeted amounts, the company may be losing money or not earning the planned margin. KPI highlights for the Operating Expenses Action Center include: Operating Expenses by Periodīy comparing the actual operating expenses in a fiscal period to the budget for the same period, managers can see whether or not their predictions are on target. QAD Action Centers provide analytics to help both managers and users monitor metrics and KPIs.
In a competitive industry, understanding and managing operating expenses well can be the difference between success and failure in making sales. For example, it’s obvious to most people that the cost of components on the bill of materials is part of the product cost, but what about other costs such as cutting oils that help equipment run more smoothly, or packaging for shipping the finished product? Those are operating expenses, and, unlike overhead, they vary with the volume of production. Knowing and understanding operating expenses helps companies to set prices for their products. Managing product costs is one of the most critical parts of operations management, and operating expenses make up a big part of those product costs. Next, we will provide an overview of the Operating Expenses Action Center as well as the associated key performance indicators (KPIs). In our previous Actionable Insights blog, we discussed the Customer Support Action Center.
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