Blog · Board and management reporting
Seven kinds of revenue leakage that a B2B company's own ledger and contracts can find: unagreed discounts, contracted price not applied, unbilled deliveries, credits without a cause, contracted volume not ordered, early payment for no discount, and services delivered outside the scope. For each, the join that finds it, the identity that proves the figure, and a worked total that most companies would not believe until they saw the lines.
Revenue leakage is not one thing. It is seven joins between exports the company already has, each producing lines with a value, and the total is usually larger than anyone expected because each kind was somebody else's problem. This guide sets out the seven, the join that finds each, and the identity that proves the figure.
| # | Leak | Join | Identity |
|---|---|---|---|
| 1 | Unagreed discount | Invoice lines × price list × agreements | List − agreed − unagreed = invoiced |
| 2 | Contracted price not applied | Invoice lines × contract prices × customer mapping | Lines at contract + over + under = lines |
| 3 | Delivery with no invoice | Delivery log × invoice lines | Deliveries = invoiced + credited + uninvoiced |
| 4 | Credit with no cause | Credit notes × reason codes | Credits = coded + uncoded |
| 5 | Contracted volume not ordered | Contracts × ledger | Committed = ordered + shortfall |
| 6 | Early payment for no discount | Payables × terms × discounts taken | Paid = on terms + early with discount + early without + late |
| 7 | Out-of-scope delivery | Time entries or deliveries × contract scope | Delivered = in scope + out of scope billed + out of scope unbilled |
Invoice lines, the price list dated, price agreements, contract prices and the customer mapping, the delivery log, credit notes with reason codes, contracts with committed volumes, the payables ledger with terms, and time entries or delivery records against scope. Identifiers only.
Company revenue $84m.
| # | Leak | Lines | Value | Share of revenue | Recoverable? |
|---|---|---|---|---|---|
| 1 | Unagreed discount | 4,100 | $610,000 | 0.7% | Forward: pricing discipline |
| 2 | Contracted price not applied, under | 880 | $190,000 | 0.2% | Forward: mapping |
| 3 | Delivery, no invoice | 140 | $220,000 | 0.3% | Yes: invoice now |
| 4 | Credit, no cause | 610 | $340,000 | 0.4% | Partly: causes to find |
| 5 | Contracted volume shortfall | 9 contracts | $410,000 | 0.5% | Conversation: take-or-pay terms |
| 6 | Early payment, no discount | 2,200 | $63,000 cost of capital | 0.1% | Forward: terms discipline |
| 7 | Out of scope, unbilled | 310 | $150,000 | 0.2% | Partly: change orders |
| Total | $1.98m | 2.4% |
Two percent of revenue, found in seven joins, none of which needed new data.
Three first: it is money owed for goods delivered. Then four, because uncoded credits often hide one and two. Then one and two forward. Five is a commercial conversation. Six and seven are process.
One leak owned; six not. Finance watches credits; sales watches discounts; nobody watches deliveries.
Totals without lines. A leakage figure with no invoice lines behind it is an estimate nobody acts on.
Undated price list. Leak one and two computed against today's prices; everything before a price change looks wrong.
Read as fraud. Almost all of it is process. The lines say which.
Mapped once, the exports produce the seven lists, their values and their identities every month. Covirage builds this from the exports as they are. The board reporting solution describes the setup, and the price realisation guide covers the largest of the seven in depth.
No. Some is fixed forward, some is a conversation, some is a credit that was right and just unrecorded. The report values each kind, lists the lines, and the finance and sales teams decide which to pursue. Even the unrecoverable kinds are worth knowing, because they are decisions nobody made.
At distributors and manufacturers, unagreed discounts and contracted price not applied. At service firms, scope creep and unbilled work. At any company with a delivery operation, deliveries with no invoice are the most surprising, because everyone assumes the system catches them.
No. Invoice lines, the price list, the agreements, the delivery log, credit notes, the payables ledger and the contracts. All exports; all on identifiers. The joins are the method.