Supply chain decisions affect your bottom line more than most businesses realise. Not just through the price you pay for goods, but through freight costs, storage costs, cash tied up in stock, write-offs, currency exposure, and the finance team hours spent trying to reconcile it all.
The problem, for most businesses, is visibility. Purchasing data sits in one place. Inventory values sit in another. Finance does the month-end close and discovers costs that operations didn’t know existed. By the time anyone has an accurate picture of what the supply chain actually costs, the decisions that caused it are weeks in the past.
Business Central connects supply chain management to financial management. You get a clear, real-time picture of what your supply chain costs, and the tools to control it.
Why Financial Visibility Matters
When supply chain and finance run in separate systems, costs get lost in the gap between them.
Freight charges sit in a spreadsheet. Supplier invoices are matched manually. Landed costs are estimated rather than calculated. Inventory is valued at purchase price without accounting for the additional costs incurred to get it onto the shelf. The result is that margin calculations are wrong, cost reports are delayed, and pricing decisions are based on incomplete information.
Business Central removes that gap. Purchase orders, goods receipts, supplier invoices, stock movements, and landed costs all feed into the same financial records in real time. Your finance team and operations team are looking at the same data. There’s no reconciliation process at month end because there’s nothing to reconcile.
Landed Costs
The price on a supplier invoice is rarely the full cost of getting stock to your warehouse.
If you’re importing goods, you’ll also be paying freight, insurance, customs duties, and potentially handling charges. If you’re buying domestically, there may still be delivery surcharges or fuel levies to account for. All of those costs affect the true cost of your stock, and therefore your margins.
Business Central lets you allocate additional costs to individual items or purchase lines. You can spread freight across all the items in a shipment, weighted by value, quantity, or weight, depending on what makes most sense for your products.
Those landed costs are added to the inventory value of the items. So when a product is sold or consumed in production, the cost of goods sold reflects the true purchase cost, not just the supplier unit price. Your margins are accurate. Your pricing decisions are based on real numbers.
For businesses importing goods from Europe, Asia, or further afield, this is not a marginal improvement. It’s a material difference to how accurately you understand your costs.
Inventory Valuation Methods
How you value your stock affects your reported costs, your gross margin, and the inventory figure on your balance sheet.
Business Central supports several costing methods, and you can apply different methods to different items depending on what suits your products:
- FIFO (first in, first out): stock is valued in the order it was received. As older stock is sold or used first, the cost recorded reflects the purchase price of those earliest units. This tends to produce the most accurate picture of current inventory value when purchase prices are rising.
- Average cost: the system calculates a running average cost across all units in stock. Each new purchase adjusts the average. This smooths out price fluctuations and is widely used in distribution and manufacturing.
- Standard cost: items are valued at a predetermined cost. Any difference between the standard cost and the actual purchase cost is recorded as a variance. This is common in manufacturing, where it’s useful to separate planned costs from actual costs and understand where the differences are coming from.
- LIFO and specific cost: also available for businesses with specific requirements.
Choosing the right costing method isn’t just an accounting decision. It affects how you analyse margins, set prices, and report profitability to stakeholders. Business Central gives you the flexibility to make the right choice for each part of your product range.
Open purchase orders represent a future cash commitment. Most businesses know that in theory, but struggle to see it clearly in practice.
If your purchasing data and your finance system don’t talk to each other, your cash flow forecast is incomplete. You might be forecasting a comfortable cash position next month without accounting for a cluster of large supplier payments that are about to fall due.
Business Central includes open purchase order commitments in cash flow forecasting. You can see what’s due to be paid, to which suppliers, and when. Alongside your sales pipeline, stock receipts, and other outgoings, that gives you a forward view of your cash position that’s grounded in real data.
For growing businesses carrying significant stock investment, or businesses with seasonal purchasing patterns, that visibility helps you manage working capital more confidently. You’re not caught short by payments you didn’t see coming.Budget Tracking and Purchase Spend Control
Business Central lets you set purchasing budgets by category, department, supplier, or time period, and track actual spend against those budgets in real time.
If a category is running over budget, you see it as it happens rather than at month end. That gives managers the information they need to act quickly, whether that’s challenging a purchase, delaying an order, switching to an alternative supplier, or flagging a pricing issue with the supplier.
Purchasing budgets also feed into approval workflows. You can configure the system so that orders which would breach a budget require additional authorisation before they’re raised. That means budget overruns are caught before they happen, not after.
For businesses where supply chain spend is one of the largest cost lines, this level of control makes a meaningful difference to financial performance.
Supplier Invoice Reconciliation
Matching supplier invoices to purchase orders and goods receipts manually takes time and creates risk. Errors slip through. Overcharges go unnoticed. Invoices sit in a queue because no one can confirm whether the goods were actually received.
Business Central automates the three-way matching process. When an invoice arrives, the system compares it to the original purchase order and the goods receipt. Quantities and prices need to align within the tolerances you define. If they don’t, the invoice is flagged for review before it reaches the payment run.
This catches overcharges, duplicate invoices, and quantity discrepancies automatically. It also speeds up your accounts payable process. Invoices that match cleanly move through to payment without manual intervention.
Supply Chain Cost Reporting
Business Central includes reporting tools that let you analyse supply chain costs across multiple dimensions: by supplier, item, category, location, or time period.
You can identify where costs are rising, compare supplier pricing across periods, track freight costs as a proportion of purchase value, and spot margin trends before they become a problem.
Combined with Power BI, you can build dashboards that give your management team a live view of supply chain spend, without waiting for the finance team to produce a report. If costs are moving in the wrong direction, the right people can see it and respond quickly.
For businesses where supply chain cost is a key driver of overall profitability, that kind of real-time reporting changes how decisions get made.
Who Benefits Most
Financial visibility across the supply chain matters most for businesses where:
- Margins are tight and every cost needs to be understood and controlled, which is common in food and beverage and distribution and wholesale
- International sourcing adds complexity through freight charges, duties, and currency exposure
- Cash flow management is a priority, particularly for businesses carrying significant stock investment or operating with seasonal demand patterns
- Finance and operations need to work from the same data, rather than spending time reconciling figures at month end
- Regulatory requirements in life sciences mean financial records related to purchasing need to be accurate, auditable, and traceable
If your supply chain costs aren’t fully visible in your financial reporting, Tecvia can help you close that gap. Get in touch to find out how Business Central can give you a clearer picture of what your supply chain actually costs.
