Pricing and Profitability Management: A Practical Guide for Business Leaders

Where to Go from Here?

The regulatory environment provides an overarching framework for pricing and profitability decisions, and it can impose significant restrictions. Actions cannot be taken unilaterally by salespeople. Instead, all pricing processes, policies, and decisions must be reviewed for legality and to prevent significant and potentially costly pricing mistakes from being made. As we have discussed, regulation and licensure affect pricing in a variety of ways depending on the type of product or service as well as the sales jurisdiction.

Regulatory issues must become a standard part of the pricing equation; otherwise, what appears to be a solid pricing policy can be undermined by unforeseen taxes, fees, and charges, as well as by compliance costs. Incorporating regulatory considerations throughout the pricing and profitability management lifecycle is critical for maintaining—and improving—the competitive position of a business.

With a little education, improved policies, and a closer alignment of the tax and pricing functions, companies can make profit improvements to the real bottom line: after-tax net income. By taking certain steps, companies can incorporate tax considerations more effectively into pricing processes, policies, and strategies. These include determining:

• Current tax and regulatory attributes and strategies for using these attributes most effectively
• Tax and regulatory regimes that apply to the current supply chain or delivery system
• Where jurisdictional ...