“I arrived at a company with flawless financial reports – every department’s numbers were accurate for their own system. But profits kept shrinking, and nobody could explain why. Turns out, purchasing tracked materials in one unit while product costing used completely different units. Both systems were recording correctly, but the conversion between them was wrong. For months, management made pricing decisions based on fundamentally flawed cost calculations that each department thought were accurate.”
The fix: A simple audit of unit consistency between systems can prevent months of hidden profit leaks.