Example Waterfall Chart

To begin with let's look at an example of a Waterfall Chart in the system.

Here you have a waterfall that was created in Pricefx Analytics. This is based on a single product for a customer, based on sales for a single year. 

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Based on the parameters the system has collated data from the various parts of Pricefx to produce the resulting waterfall chart.

This is done in much the same way in the Pricing Waterfall Chart in the Quote header, but in Quoting it creates the chart based on the customer information such as agreements and promotions in place, price lists information by region, country, customer, or even customer or product group and updates the data as you create the quote.

(Here is the original quote with 70 units of quantity for the first product listed)

This provides you with the ability to alter the quote and continuously recalculate and determine the health of the quote as you progress, taking full advantage of the data already present within the system.

(Here the quantity changed to 200 units of quantity for the first product listed and see the updates in the waterfall)

So let's see what information it contains and where it comes from.

The Different Bars and their Meaning

In this example, the blue bars represent the different price points available throughout the pricing lifecycle. Starting with the Base Price on the right and moving through the Global List Price and Local List Prices, through to the Invoice Price, Net Price, Pocket Price, Pocket Margin, and finally the Gross Margin. 

Then the green bars represent the adjustments and additional charges applied to the product, whether at a global or local level or directly to the quote itself. These are positive values.

 And finally, the red bars represent a decrease or deduction due to discounts, rebates, and other costs incurred.

Base Price, Adjustments, Global List Price, and Local List Price

So let's break this down a little bit. From the base price to the first primary (Global) list price and the second country list price, these prices are extracted from within the Price Setting Module where Pricing Manager will have set up global and local price lists or Live Price Grids for customers and products.

The adjustments are driven by setting within your Company Price Parameters settings.

And then as you prepare the quote the system gathers more data to present and enrich your waterfall chart as you make changes.

Discounts and Charges

As you add items the system checks if there are discounts available either due to current promotions or other agreements in place with the customer or across the product line.

This information will be pulled from the information input into our Agreements and Promotions module, which keeps a record of a wide variety of configurable agreement types, such as competitor discounts, sales channel discounts, bundle discounts, etc…

You can see the promotions in the quote in the Details section as well.

Quoting Inputs

And then within the quote itself, you can add any additional freight charges, warehousing, and packaging adjustments, including the installation/services/customization charges.

Taking into account this information from the Local List Price through the invoice price which is captured on the billing document itself.

Off Invoice Costs

To really understand the health of this quote you need to understand the off-invoice costs to determine the margins. So Pricefx continues to interrogate other data that it has, such as Payment Terms costs, Rebate and Buying Group Rebates, from the Rebates module.

Whether that's based on sales volumes, sales growth, or incremental target. They can all be captured here and the data extracted and added to the Waterfall Chart to produce the Net Price.

The Rebates Module along with our Channel Management Module allows you to not only track rebates, but work all the way through to processing claims once purchasing is completed.

Actual and Variable Costs to Gross Margin

And from Net Price the actual costs are deducted for Freight, Warehousing, Packaging, Support, and Warranty as well as Installation/Services and Customization to provide you with a Pocket Price:

From which the system deducts the Variable cost, to produce a Pocket Margin and then you deduct any fixed costs to give a final Gross Margin.

Importance of the Waterfall Chart

The more elements, or data points, you add the more detailed and richer the chart becomes. Tracking these parameters in one place dynamically, as you produce your quote gives you the ability to clearly identify whether this quote is competitive, good for your customer and ultimately going to produce a healthy margin for your organization.

That covers the main inputs of the waterfall chart and where the information is derived from to create a sophisticated visual representation of your quote that is dynamic, versatile, and simple to understand, powered by the data across the Pricefx Platform.