Explore KPIs and Transaction Types
Learning Objectives
After completing this unit, you’ll be able to:
- Describe the key performance indicators for fund templates.
- Explain the advantages of rate-based funding templates.
- Identify the benefits of fund transaction templates.
Fund Administration and KPIs
In fund administration, KPIs are monetary, volume, or percentage measures that show how funds are performing based on different inputs.
One such KPI is the latest estimate (LE), which is the sum of the planned budget and the actual budget. The planned budget is the estimated budget earned based on the planned revenue or volumes for the year, whereas the actual budget is based on the resulting revenue or sold volume. As actuals are received throughout the year, the LE is updated to reflect the most accurate budget.
KPIs can be customized, allowing key account managers like Gustavo to choose which ones to add to a fund template. For example, depending on the business need, you can add LE revenue, LE profit, or LE market share to a fund template.
Each fund template contains a list of KPI definitions used to measure the success of the fund.
| KPI Name | Definition |
|---|---|
|
KPI set |
The set of KPIs that apply to the fund. Select only the KPI sets with the usage as funding. |
|
KPI subset |
The filtered set of KPIs in the rate-based funding hierarchy grid. |
|
Actual RBF |
The KPIs used for the total rate-based funding actuals for the fund. |
|
LE RBF |
The KPIs used for the LE rate-based funding total for the fund. |
|
LE volume |
The KPIs used for the LE volume total KPI on the fund. |
|
LE revenue |
The KPIs used for the LE revenue total KPI on the fund. |
After learning about KPIs, Gustavo shifts his focus to rate-based funding templates.
Funding Methods
Remember, you have two ways to build a budget: using fixed funding or rate-based funding.
- With fixed funding, key account managers like Gustavo receive a fixed amount as a budget for the planning cycle, customer, or optionally, the category or brand.
- In rate-based funding, key account managers receive a flexible amount for promotional activities based on revenue or volume. It’s either a percentage of the revenue or a rate per case or unit. Rate-based funding allows for a fair-share distribution of trade budgets to retailers and better control of both purchasing and distribution patterns.
Let’s dive deeper into funding methods.
| Funding Method | Pros | Cons | Example |
|---|---|---|---|
|
Fixed funding |
Good for manufacturers who cap the number of goods they distribute |
Tricky when trying to manage a budget because key account managers are limited to a set budget amount |
A fixed fund is better for allocating a defined amount of extra shelf space to a promoted product in a store. |
|
Rate-based funding |
Helps manufacturers create a budget based on how much product their companies can distribute. When manufacturers promote and move more products, they receive an additional budget according to their needs. |
Not an ideal solution if you’re selling a fixed number of goods |
Rate-based funding benefits manufacturers with high product volume. It gives them a better budget estimation and helps them spend proportionally. |
Gustavo considers these pros, cons, and examples as he decides the best approach for his new NTO store promotions.
In the meantime, let’s discover the role of fund transaction templates.
Fund Transaction Types
A transaction is the flow of money from one budget account to another. For instance, you perform a transaction by moving the budget for promotional activities of a product from a source fund to a target fund. You can have multiple source and target funds depending on the transaction type.
Salesforce Trade Promotion Management includes a variety of transaction types. Let’s take a closer look.
Gustavo can use these different transaction types to build fund transaction templates. A fund transaction template defines the available transaction types.
Staying the Course
In this unit, you followed along with Gustavo and learned about KPI definitions, funding methods, and transaction types. In the next unit, let’s explore how Gustavo creates fund templates.