Method · 5 min read
Price realization: how much of your list price you actually invoice
Your catalogue says one price. Your invoices say another. The distance between them has a name, a size, and a direction of travel - and most revenue reports never show it, because they only ever carry the second number.
The question it answers
Realization is the share of list price that survives to the invoice. It is one division, and it is not the interesting part. What is interesting is whether it MOVED, and what moved it.
Two companies can both realize 80% of list. One holds a firm tariff and grants a consistent discount; the other raised the tariff and gave the increase straight back at the negotiating table. The rate is identical. The commercial situation is not.
This analysis separates the two: what came from the list price, and what came from the discount. The split reconciles to the cent with the price effect of the revenue bridge, so it can be read next to it without an argument about definitions.
The columns you need
Four columns, and one of them is the whole point:
- A period label, a product identifier and a quantity.
- A net revenue amount - what you invoiced.
- A gross revenue amount - what the same lines would have been at list price. Without it there is no tariff to compare against, and the analysis refuses to open rather than showing you half of it.
The gross column has to be there on every retained line. A partial one would compare two different sets of products and call the difference a discount. When lines are missing it, the tool says how many, and where.
Two readings that must not be mixed
The screen carries two blocks, deliberately kept apart.
Gross to net shows amounts, period by period: what was invoiced at list, what was invoiced, and the gap. It covers every product in each period, including the ones that arrived or stopped between them.
Change drivers shows effects, and only on products present in both periods. A product that launched has no price change to measure; putting it in a price effect would turn a change of scope into a change of price.
Mixing the two is the classic error of this analysis: a portfolio that added cheap products looks like a portfolio that discounted, unless someone kept the perimeters separate.
What it looks like on a small file
The sample that ships with the tool has seven products over two quarters. In the reference quarter it invoiced 3,000 at list and 2,400 in fact - a realization rate of 80%, and a 600 discount.
The change drivers then split what happened to the price of continuing products:
- List price: +220. The tariff went up on part of the range.
- Discount: −50. Slightly more of it was given back.
- Net price: +170. The two, added.
That last figure is not a separate calculation. It is the price effect of the revenue bridge, unchanged - which is what makes the first two defensible.
Build yours
Your own realization, in your browser
Drop an export with a gross revenue column and a net revenue column. It all runs inside your browser: nothing is uploaded, which you can check in the Network panel while you work.
Start a monthly reviewWhat it will not do
This analysis measures observed gross-to-net realization. It does not estimate recoverable margin. That sentence is on the screen, in the export and in the review pack, and it is not a legal precaution.
A gap between list price and net price is a fact that has already happened. Presenting it as a sum to go and collect would assume the goods could have been sold at list - which a sales file cannot establish.
It will not tell you whether your list price is right. A tariff nobody pays is a catalogue problem, not a discount problem, and the two look identical in this analysis.
It will not attribute the gap to a customer, a salesperson or a decision. It reports what the file contains, at the grain the file has.
Questions
What if my gross revenue is only on some lines?
The analysis stops and tells you how many lines are missing it. A realization rate built on part of the file would compare two different sets of products.
Can gross revenue be below net revenue?
Yes - a credit note or an adjustment can do that. The figures are shown as they are, counted in the data quality panel, and never silently corrected.
How does this relate to the discount effect in the bridge?
It is the same number. The bridge splits its price effect into gross price and discount when a gross column exists; this analysis is that split, read on its own terms with the amounts alongside.
Does my file leave the browser?
No. The whole calculation runs in the page, on your machine. How to verify that in two minutes.