Use case · Pocket-margin leakage
Trace where quoted margin fails to reach the pocket
Pocket-margin leakage is the gap between an agreed comparison basis and the net economics supported by approved transaction and condition data. A useful investigation reconciles list or invoice price, discounts, rebates, freight, services, credits, cost basis, volume, period, and currency before assigning an owner or claiming an opportunity.
- Content owner
- Northra
- Last reviewed
- 2026-08-03
Trigger
When this workflow starts
A product, account, segment, or period falls outside an agreed margin or price-quality expectation, or commercial conditions accumulate without a clear view of their combined effect.
Operational gap
Why the manual path breaks down
Commercial conditions are often split between invoice lines, rebate tables, freight records, CRM notes, contracts, and finance adjustments. Comparing one headline margin can hide timing differences, missing allocations, or duplicate effects and may send a team toward the wrong account action.
Required evidence
Inputs that must be named before analysis
- INPUT 01The approved comparison basis: plan, prior period, target condition, contract condition, or another explicitly named reference.
- INPUT 02Transaction-grain quantity, invoiced price, currency, date, product, account, and source identifiers.
- INPUT 03Discounts, rebates, freight, surcharges, services, credits, returns, and other agreed gross-to-pocket elements.
- INPUT 04The governed cost and allocation basis, period, scope, FX treatment, and reconciliation status.
Decision path
A reviewable workflow, not an automatic action
- 01
Fix the comparison frame
Name the scope, period, currency, cost basis, and comparison source before evaluating a gap.
Evidence retained: Scope stamp, period, basis, FX note, source versions, and reconciliation coverage.
- 02
Build the gross-to-pocket bridge
Reconcile each permitted condition from the starting price to the supported net result without hiding absent inputs.
Evidence retained: Transaction and condition lineage, amount, unit, sign, allocation rule, and missing-data state.
- 03
Separate cause from symptom
Distinguish price, mix, volume, cost, timing, rebate, freight, service, and data-quality effects before assigning leakage.
Evidence retained: Reason category, calculation version, comparison basis, and residual reconciliation.
- 04
Find the governed action
Connect the supported driver to the relevant contract, pricing control, account plan, or operating owner.
Evidence retained: Affected object, accountable owner, available action, dependency, and constraint.
- 05
Prove the outcome
Keep approved opportunity, implemented change, and transaction-reconciled realization as separate stages.
Evidence retained: Approval, effective date, transaction comparison, attribution rule, and realized-value record.
Decision output
What the owner receives
A reconciled leakage brief showing the comparison basis, gross-to-pocket components, primary supported drivers, missing evidence, affected scope, accountable owner, and action state. It is not a substitute for period-close accounting.
Human gate
Where authority remains
Commercial and finance owners confirm the comparison basis, allocations, cause classification, and proposed response. Customer-impacting action and any realization claim require their own approval and evidence.
Uncertainty
What the result must not hide
- Incomplete rebate, freight, service, or credit data lowers reconciliation coverage and prevents a complete conclusion.
- Timing and accrual differences remain identified separately from commercial leakage.
- A correlation between a condition and a margin gap is not presented as causation without supporting evidence.
- The same economic effect cannot be attributed to multiple actions or periods without an explicit allocation rule.
Measurement
How to tell whether the workflow created value
Sources and boundaries
Public references used on this page
- Northra trust center
Northra. Public operating boundaries for source traceability, data handling, bounded AI, and human authority.
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