Audit of pricing processes

The efficiency of pricing processes is one of the basic factors influencing the company’s profit. The course of these processes is strongly influenced by the interactions of key departments in the company, i.e. Management, Sales, Finance, Marketing, Production Departments having different KPIs. This may result in internal conflicts of interest within the organisation and a lack of direct responsibility for the effectiveness of pricing decisions.

 The most common pricing processes:

1. Processes of setting price list and catalog prices
2. Processes of determining trade discounts and bonuses
3. Processes of establishing commercial promotions, sales
4. Processes determining price increases and decreases

The audit of pricing processes takes 5-6 weeks. During this period, we meet f2f with the Management Board and leaders of key teams in the company, i.e. sales, marketing, shopping, trade marketing, controlling, finance. In the next stage, we conduct a survey among the participants of the processes in order to map the procedures, roles, authorisations and responsibilities in terms of price decisions. On the basis of the materials collected we create a map of processes in the Business Process Model and Notation (BPMN) standard and assess their effectiveness.

 The result of the audit is a report containing:

1. Development of a detailed map of the existing processes of setting prices, discounts, bonuses
2. Identification of margin leaks
3. Evaluation of the efficiency of the processes in terms of the achievement of the objective and the resources involved
4. Recommendations on roles and authorisations in making price decisions.
5. Recommendations for an optimal information flow chart and analytical tools necessary for effective implementation of the process.

Benefits of optimizing pricing processes

The main benefit of an audit of pricing processes is the identification of the potential for lost profit margin as a result of inefficient pricing processes and recommendations for their optimisation.

Organisations that consistently optimise their pricing processes reduce margin leaks, are more price-competitive and reduce the risk of participating in harmful price wars.