Diagnostic Assessment

P&L Project
Brief

Diagnostic Assessment // Decision Infrastructure

Financial visibility and governance for e-commerce parts business. The shape of a P&L exists. The math cannot yet be trusted.

View Blank Template →
Section 1

Executive
Summary

The e-commerce P&L initiative exists to create financial visibility and decision-grade reporting for the parts e-commerce business. It was explicitly positioned as the VP of E-Commerce's #1 priority and a prerequisite for scaling growth levers: marketing, marketplaces, pricing automation.

As of the initial assessment, the P&L was directionally correct but not decision-safe. Revenue and expense data existed, but allocation logic, COGS accuracy and formula integrity were incomplete, resulting in unresolved errors and open follow-ups.

Section 2

Problem
Statement

Core problem: Leadership cannot confidently answer "Are we actually making money on e-commerce parts... and why?"

Specific Gaps

  • Fragmented revenue across primary storefront, two marketplaces and B2B aggregator
  • Blurred COGS vs. overhead vs. corporate allocations
  • Platform fees and shipping expenses buried in generic GLs
  • No reliable gross margin or contribution margin visibility

This is less an accounting exercise and more a governance and prioritization tool.

Section 3

Scope &
Structure

Revenue
Primary storefront parts sales, marketplace sales (2 channels), B2B aggregator, shipping revenue, discounts/returns/store credits
COGS
Equipment part expense, freight, packaging and shipping supplies, platform fees (all channels), marketplace advertising
Operating Expenses
Marketing (PPC, email, SMS, affiliates), software and tooling, admin and overhead (rent, insurance, payroll allocations), depreciation and interest
Format
Monthly rollup (Jan...Dec), channel-level granularity, multiple views including template and GL-mapped tabs
Section 4

Current
State

What's Solid
  • Revenue sources clearly enumerated
  • Marketplace fees and ad spend visible
  • Software sprawl fully exposed
  • Finance collaboration documented and active
What's Broken or Incomplete
  • #ERROR! fields in Net Sales, Total COGS, Gross Profit and Net Profit
  • COGS logic not fully validated against real transactions
  • Shipping expense allocation still unresolved
  • Interest expense flagged as suspiciously high
  • Some expenses clearly corporate but flowing into e-commerce

In short... the sheet exists, but the math cannot yet be trusted.

Section 5

Ownership &
Working Model

Primary Driver
Senior Operations Strategist: structure, logic, iteration, cross-functional follow-ups
Key Partners
Finance (GL mapping, account creation, validation); Procurement (vendor pricing, freight, COGS inputs); Marketing (ad spend, tooling costs); Leadership (VP of E-Commerce as exec sponsor)
Governance Reality
Accounting owns new GL creation. Multiple approval hops slow structural fixes. P&L work is interleaved with day-job execution.
Section 6

Open Risks &
Assumptions

1
"Once the P&L exists, decisions will be obvious."
Counterpoint: A noisy or misallocated P&L can be worse than none. False confidence is expensive.
2
"We can fix this incrementally."
Counterpoint: Incremental fixes won't resolve systemic issues like shipping allocation, shared overhead or interest treatment.
3
"Finance clarity precedes growth."
Counterpoint: True...but growth decisions are already happening (ads, marketplaces). The P&L is chasing reality, not leading it.
Section 7

Strategic
Importance

The 3-year roadmap explicitly gates growth levers behind P&L maturity: loyalty programs, affiliate scale-up, advanced pricing optimization, full CAC/LTV visibility.

Bottom line: No clean P&L, no responsible scale.

Section 8

Bottom
Line

This project is foundational, unfinished and unavoidable. The P&L is far enough along to reveal uncomfortable truths (cost structure, tool sprawl, margin pressure) but not far enough to safely guide investment decisions.

The remaining work is less about spreadsheet skill and more about organizational alignment on what "e-commerce profitability" actually means inside a billion-dollar enterprise.

Related Work

The P&L build required the same cross-functional diagnostic methodology used in other engagements. These frameworks from the E-Commerce Strategic Summit apply directly:

Diagnostic Tool
Pressure Points
Register
21 organizational constraints across 6 categories. The same diagnostic lens applied to the P&L initiative.
Diagnostic Tool
Dependency
Friction Map
20 cross-functional handoff points where work breaks down. Directly relevant to a 6-function financial build.
Diagnostic tool by Angie Bailey // angieqbailey.com
Back to Case Study