ERP stands for enterprise resource planning. An ERP system connects core business processes and their records across departments. In a retail chain, one sales order can be linked to stock reservations, deliveries, receipts, inventory costs and accounting documents. That connection lets each team answer a different question about the same order: what can we deliver, what did we deliver, what did it cost and how much have we collected? See Oracle's overview of ERP for the broader definition.
Consider an order that shows as complete by the time the manager opens the dashboard. Four items arrived late, a higher-cost store supplied them, and the customer still owes part of the delivered value. A useful ERP report shows all three facts, with a way to trace each number back to its record.
Illustration of a retail team checking the order records for two batches of goods.
One order, two deliveries and two payments
Illustrative example. Amounts are in Vietnamese dong (VND), and exclude taxes and fees. There are no returns. The customer orders 10 units at a net selling price of VND 1.2 million each. All 10 are due by the same deadline. Store A delivers six before that deadline; Store B delivers four the next day. Unit cost is VND 800,000 at Store A and VND 900,000 at Store B.
The customer pays VND 4.8 million in advance and another VND 6 million after the second delivery. For this example, the business has confirmed the receipts and applied them to delivered value as it becomes available. The advance is counted once in cumulative cash received, even though it is later applied against the delivery.
| Measure | At due time | Final |
|---|---|---|
| Units delivered | 6 of 10 | 10 of 10 |
| Net delivered value | 7.2 | 12.0 |
| Cost of delivered units | 4.8 | 8.4 |
| Gross profit | 2.4 | 3.6 |
| Gross margin | 33.33% | 30% |
| Confirmed receipts applied | 4.8 | 10.8 |
| Outstanding against delivered value | 2.4 | 1.2 |
The order ends up fully delivered. Its original delivery promise was still missed. Its gross profit grew in dong as more goods were delivered, while its margin fell because the second batch cost more per unit. Its delivered value and cash received remain different numbers.
Delivery KPIs: measure units and complete orders separately
On-time unit fulfilment = units delivered by their deadline ÷ eligible units due × 100. At the deadline, the order has 6 of 10 units on time, or 60%. The four late units complete the order the next day; they do not change how many arrived on time.
Order OTIF (on time, in full) = eligible orders delivered in full by their promised deadline ÷ all eligible orders due in the reporting period × 100. This example contributes zero passing orders out of one eligible order. The 60% unit result is not its OTIF result, and one order does not establish a chain-wide rate. For the order-level definition, see APQC's OTIF measure.
Define which commitment is measured, how approved changes are recorded and which cancellations are excluded. Include eligible orders that were due but never delivered; measuring only completed orders drops the failures the KPI should expose. Confirm delivery from the accepted handover record. A warehouse issue or a transfer leaving a branch does not prove that a customer received the order.
Gross profit and margin: match the cost to the units delivered
Gross profit = net sales value − corresponding cost of goods sold. Gross margin = gross profit ÷ net sales value × 100. Here, the management illustration compares net delivered value with the cost of those units. Six units from A cost VND 4.8 million; four from B add VND 3.6 million. The second batch earns VND 1.2 million on VND 4.8 million delivered, a 25% margin, bringing the weighted margin down from 33.33% to 30%. Across both batches, VND 12 million delivered less VND 8.4 million cost leaves VND 3.6 million gross profit.
At chain level, add the eligible sales values and matched costs, then calculate the margin from those totals. Averaging branch or order percentages gives small transactions the same weight as large ones. Check that price adjustments, returns and the related costs use a consistent scope and cut-off before comparing stores. Gross profit also excludes operating expenses; it does not show the chain's net profit.
Accounting reviews the recognition date, approved valuation method, tax treatment and posting records separately. The example uses delivered value to explain the operating report. The resulting figures alone do not establish when revenue or a receivable must be recognised in the ledger.
Cash and amounts outstanding: follow confirmed receipts and allocations
Cumulative cash received = the sum of distinct confirmed receipts as of the cut-off. Here, VND 4.8 million plus VND 6 million equals VND 10.8 million. A bank statement line may confirm a recorded receipt; it is not a second receipt. Applying the advance to the order also does not generate another payment.
Outstanding against delivered value = net delivered value − confirmed receipts applied to that value. Before the second batch, VND 7.2 million minus VND 4.8 million leaves VND 2.4 million. After both deliveries and payments, VND 12 million minus VND 10.8 million leaves VND 1.2 million. Receipt coverage at that point is 90% (VND 10.8 million applied ÷ VND 12 million delivered); whether the rest is overdue depends on the agreed payment terms and due date. Pending transfers and unapplied amounts need their own status and should not silently reduce this balance.
Use one cut-off to compare deliveries and confirmed receipt allocations. A payment after midnight belongs in the later snapshot under the agreed rule, even if it settles an earlier delivery. Keep the receipt, bank reference, allocation and any unresolved difference available for finance and cash reconciliation.
Who acts when a KPI is off?
- Sales: confirms the original promise, documents customer-approved changes and notifies the customer if the remaining units will be late.
- Warehouse and delivery: record the dispatch and accepted quantities for each batch; investigate a missing handover or a mismatch with the sales line.
- Finance and accounting: verify the payment and its allocation, check the matched cost and reconcile the relevant records to the ledger.
- Chain manager: approves an exception or revised plan, assigns an owner and a due time, and checks the evidence before closing it. Closing a delivery exception should leave the original missed promise visible in historical reporting.
Each handover needs the order and line, the quantity or amount still open, the responsible person, the next action and the evidence required. A partially delivered order may require action from sales and delivery; an unapplied payment may require finance even after the last box arrives. One status cannot represent every department's work.
What to ask for in a retail ERP demo
Run an anonymised order across two stores, two deliveries and two receipts. Ask the demonstrator to stop at the original deadline, then advance to the final receipt. Can a store manager trace the six units delivered on time? Can finance find the remaining balance and see that the advance was counted once? Can accounting explain the cost by batch and reconcile the resulting entries? Use the same order to review sales and delivery, accounting and the wider retail ERP workflows.
If the order already falls short at the stock check, start with how to trace stock availability, reservations and incoming supply. Bring a comparable situation to a workflow discussion with Blackwind to agree which records, permissions and exception checks should be in scope.