Echo Engineering & Production Supplies provides engineered rubber and plastic components to thousands of customers in the automotive, manufacturing, heavy machinery and lighting industries.
For a company that’s involved with both wholesale and retail, Echo is particularly sensitive to inflationary pressures from both ends of buying and selling. Material costs, shipping, and salaries all directly affect their profit.
With inflation running rampant over the past few years, Echo Engineering was making relatively blind financial decisions and price guessing because they couldn’t access and process enough of the data that was changing too quickly.
And like so many companies who don’t use automation or FP&A tools to deal with the increased data and fast paced business changes, Echo engineering simply didn’t have enough time in the month to analyze the data, as too much time was spent on collecting the data.
“We did not have granularity and dimensionality in our financial reporting, which led us to make blind decisions,” said Keith Deaton, CFO of Echo Engineering. “And we did not have timely data to operate with, most often.”
After implementing Datarails, a financial planning and analysis software, the manufacturing company was able to uncover data on customer margins and make far more informed pricing decisions that improved not only the finance team’s performance, but created higher value that resonated throughout the whole organization.
“We've shrunk our post close analytics time from 5 days to 2 days so that’s reduced our analysis time related to post close analytics from 40-60 hours per week across our team down to 10-15 hours,” Deaton said.
Saving that much time every month for professional teams such as finance experts helps set the tone for many other aspects of the department’s work.
There is a growing employee shortage of experienced finance professionals, and existing employees are putting more and more of an emphasis on efficient and impactful work. Therefore, being able to cut down on time spent on manual activities and increasing the time spent on analysis that drives the company will do wonders for the finance team’s motivation and output.
Other than saving lots of time every month, Deaton said that his two favorite things about Datarails are “the solution’s flexibility” and “being able to consolidate data from multiple sources.” Due to these user-friendly functions, Echo Engineering is able to import existing Excel models into the solution and use what works best from their current Excel operating environment.
This allows for an easy transition (anyone who knows Excel can use and benefit from Datarails) and increased analytics capabilities (all of the data from multiple sources is consolidated into one place).
While saving time and gaining deeper insights will always help a company increase revenue, it is especially beneficial during times of inflationary pressures. After consolidating its data, Echo Engineering was able to access customer margin analytics and then make more targeted price increases in addition to identifying and resolving payment gaps between customers.
“We’re seeing 6-8 percent of incremental price realization that drops directly to our bottom line, that helps us offset that freight and material inflationary pressure that we’re feeling across the entire business,” said Deaton.
Knowing when, where, and how to offset inflationary pressure is key to overcoming wholesale and transportation cost increases without dumping all of the burden on the customers. Deep dive analysis creates the most accurate decision making and not only helps the company survive inflation, but even allows them to increase profits.
“We, as a finance and FP&A team, have a lot more time to actually drive into results and do relevant analytics to help improve our company's decision-making process,” Deaton said. “This helps us get to the next level as a finance organization.”