Power BI can be designed based on individual KPI’s, the role of the employee, as well as the department and/or the overall business objectives, to get the desired information.  It’s relatively easy to design using tiles and graphs to tell a story on one screen in real-time.

Because of Power BI’s adaptability, one can design the reports using different set of data from all modules and business areas to create what the user is looking for in a report.

So, what about the Cash Flow mystery? Here is how Power BI helped:

Design of the report using Power BI: The CFO in the above example had a designed Power BI report using a set of metrics to help keep track of the daily cashflow among other reports:

• Margin by Items for Top Ten Items
• Sales Orders
• Purchase Requests for Inventory by Item
• Receivable for Top Ten Customers by item
• Daily Invoiced Items.
• Daily Inventory Receipts and Inventory Amounts
• Payments

Using these Data points, a report was able to be designed that includes calculations such as real-time Cash Flow; Cash Flow Projection as well as other relevant reports with all the key information in one spot. These reports once designed were saved on the CFO’s dashboard and are regularly refreshed. 

It turns out…

• The sudden spike in order is related to one product only: the high demand high value item.
• The customer was slower than usual in paying the invoices of sales of that item, while everything else is paid on time – Net 30 days.
• Large amount cash is tied up on inventory that made up that item since it is high value item and in high demand and as result of delay in the customer payment. Because of the high demand, the company is forced to a large outlay of cash to Purchase the raw material Item. Hence the large P.O approval.
• The order size for the product has gradually grown within the last two years.

Based on this insight, the CFO was able to discuss the situation with the appropriate Sales & Purchasing Department personnel to make the most prudent decisions.

• The Sales Department was able to negotiate new Terms on Payment for the sale of the item only by offering discount instead of Increasing their Credit Limit. The Terms on the other product sales would remain the same, optimizing the overall DSO

This solution was amicable to both parties, in that the invoice was able to be paid in a shorter time frame freeing up cash for the company and the client highly benefited by receiving a discount for early payment, creating a Win-Win solution.

In conclusion, Power BI is a tool that enables the user to design effective reports from different data sources in order to gain insight to  all areas of its organization; making it easier for effective decisions in a relatively short period of time. The tools are user friendly and easy to navigate, enabling the user to design intelligent reports based on the objectives & metrics of the company.