Success today isn’t just about moving stock – it’s about knowing what to measure.
In a competitive environment where margins are tight and customers expect speed, SMEs need to make decisions with confidence. They need visibility into what’s slowing them down, what’s tying up capital, and what’s putting customer loyalty at risk.
With SAP Business One already in place, you have the tools at your fingertips. The question is whether you are using them to their full potential to protect cash flow, improve processes and keep customers loyal.
Cash is king – and in distribution and manufacturing, the numbers prove it. The speed at which stock turns into cash, the reliability of fulfilment, and the accuracy of gross margin all determine whether a business grows steadily or struggles to keep up.
That’s why it’s essential to report on these metrics regularly and to read them together rather than in isolation. Let’s look at each in turn.
Inventory turnover shows how quickly stock is sold and replaced. When turnover slows, cash gets locked up and holding costs rise. You might be sitting on perfectly good inventory that will sell eventually, but that does not help when payroll is due next week.
On the other side, businesses sometimes move stock too quickly – discounting or pushing it through other channels even when there is no immediate pressure. These decisions can unnecessarily cut into margins. Clear reporting on turnover helps weigh each option properly and strike the balance between short-term cash flow and longer-term profitability.
Gross margin shows what remains after cost of goods sold – but the number on its own can be misleading. Overstocking, freight charges and storage overheads all reduce it, and the longer stock sits in the warehouse, the more it adds to costs like rent, electricity and handling. For every dollar invested in inventory, you need to know what is coming back.
Margin also needs context. A low-margin line may look unprofitable on paper, but if that product is what keeps a customer loyal to the rest of your range, removing it could reduce your overall returns. Interpreting gross margin is as much an art as it is a science.
Fulfilment time is a clear signal of customer loyalty. If orders are delayed or back orders build up, customers will go elsewhere – especially when competitors can offer the same products. Speed and reliability often matter more than price, and improving fulfilment strengthens trust while keeping the rest of the business moving.
These metrics don’t stand alone. If fulfilment time drags out, customers may cancel or switch, which erodes margin. If you overstock to guard against delays, you tie up cash and increase holding costs. Inventory turnover, gross margin, and fulfilment are closely linked, and businesses that monitor them together have a clearer picture of their performance.
Interpreting KPIs requires more than running reports. It's about knowing when the data points to action and when it reflects a broader strategy. SAP Business One is already giving you that capability – the question is, are you using it to its full potential?
Owners and managers often have a strong sense of what matters in their business. The challenge is embedding that knowledge so the entire team acts consistently. When staff can act early and managers aren’t bottlenecks, performance improves across the board.
Here are some ways to get more from SAP Business One:
Every business runs differently, and SAP Business One gives you the flexibility to measure what matters most – whether that’s overdue receivables, delivery days or sales performance. Because when data is accurate, KPIs become meaningful – not just numbers on a page. The result is a highly effective workflow where customers get a better experience, staff act more efficiently, and money flows back into the business more quickly.
Don't just look at the data, look at the bigger picture of what really keeps the business ticking. To stay competitive, SMEs need to connect their KPIs to context and action.
To get the other half of the story, you need to look at customer satisfaction – just as important, but often overlooked. Customers are quick to speak up when something goes wrong, but rarely take the time to explain why they are happy. Capturing that insight shows what you are doing well and helps you build on it.
SAP Business One makes this possible. Every customer interaction can be logged as an Activity, and you can add user-defined fields to capture sentiment. Surveys and other CRM inputs can be handled the same way, giving you a richer picture of customer experience. AI tools then take it further by analysing Activities, emails and survey responses to generate sentiment scores – turning feedback into another KPI alongside fulfilment and margin.
Bringing customer sentiment into the mix provides a more comprehensive picture of performance, combining hard numbers with genuine feedback to inform smarter decisions.
The right KPIs, tracked in the right way, provide more than reports. They drive faster cash flow, more reliable fulfilment and stronger customer relationships. The key is connecting numbers to context and building processes that turn data into action.
SAP Business One helps distributors and manufacturers do exactly that – giving small and mid-sized businesses the visibility and discipline they need to compete with confidence.
Want to get more from your SAP Business One system? Talk to us today.