Four right answers to the same margin question

A specialty distribution platform doing roughly $180M in revenue, sponsor-owned and halfway through the underwritten hold, with four add-ons in 28 months taking it from three branches to nine. The platform ran Dynamics NAV, add-on one Sage 100, add-ons two and three QuickBooks Enterprise across three company files, and add-on four, a carve-out, still ran on the seller's ERP. Forty people in finance, two more deals in the pipeline.

• Asked what gross margin was on a stock order, four general managers answered 31.5, 29.4, 28.9, and 33.2, and all four were right under their own definition
• One ran freight out through a corporate account that never touched his margin, another netted rebates at the invoice, a third accrued them quarterly, and the fourth booked inbound freight as a period cost rather than landed cost
• Consolidation took the corporate controller 11 business days through a 1,400-row mapping workbook with a tab nobody would touch, and the covenant certificate rested on the output
• The carve-out sat on a nine-month transition services agreement with six months gone, against a stranded cost line the sponsor had underwritten
• The procurement savings target assumed one vendor master and one item master, and neither existed: the same abrasive carried three part numbers and the same supplier four records

We ran a phased modernization, sequenced so the definitions and the transition services clock were dealt with first, while building toward one operating picture across all five entities. Every deliverable was tested against one question: what will the buyer's advisor ask for, and can we produce it without a project?

Governed chart of accounts and dimension model

Before any system moved, we built a narrower account list carrying entity, branch, product line, channel, and customer segment as dimensions, plus a written policy naming who may create an account. It was designed against add-ons five and six, not the four already owned. Every general manager signed it before configuration started, including the one whose margin dropped two points once inbound freight moved into landed cost.

Carve-out and transition services exit

The perimeter dispute was settled with a list rather than an argument: three years of the division's invoice history matched against the purchase agreement schedule, ship-to by ship-to, with exceptions returned to the seller line by line. Re-onboarding ran in waves scheduled against expiry rather than go-live, and payroll moved one cycle before the deadline.

ERP consolidation

All five entities moved onto Dynamics 365 Business Central, each with a mock conversion and a reconciled dress rehearsal before cutover, smallest first, with one exception: the carved-out division went when the transition agreement said so. Conformed vendor and item masters were migration deliverables rather than a follow-on project.

Close automation and reporting

Intercompany balances and eliminations moved into the system, the 1,400-row mapping workbook was retired, and the tab nobody would touch was reverse-engineered, written down, and deleted. A close calendar with named owners and a written reconciliation policy replaced a process that had lived in one controller's head.

Data warehouse and governed metric layer

A warehouse pulls from every source ledger at transaction grain. Above it sits a version-controlled metric dictionary: gross margin defined once, freight-in inside landed cost, rebates accrued on one policy, with an owner's name on every change. Row-level security puts the branch manager and the sponsor on the same definitions from the same source.

Planning, forecasting, and exit readiness

Budgeting and a rolling forecast moved onto the governed definitions, with monthly results restated on them and maintained rather than assembled the month a banker is hired. Reporting feeds the sponsor's portfolio monitoring in the format the fund reads.