Sales order profit
When entering quotations, pro formas and sales orders, you can view the sales profit for the whole order and for each order line.
Note: Profitability is calculated on a line by line basis. For this reason, profitability figures reflect line discounts, but not order or invoice discounts.
Two profit values are calculated for sales orders - estimated and realised.
On quotations and pro formas invoices, you can only view the estimated profit. On sales orders you can view the estimated and realised profit.
Estimated profit
Estimated profits are calculated when a sales order, quotation, or pro forma is entered.
The following cost prices are used to calculate estimated profit:
- For stock items using the Standard costing method The costing method is used to calculate the cost of sales of your stock items, the value of stock, and the transactions posted to your stock nominal accounts. There are four available costing methods. The costing method is specified for each product group., this is the standard cost price.
- For stock items using the FIFO, Average or Actual costing methods, this is the current average buying price The average buying price is updated each time goods are confirmed as received with a known cost price. The average buying price is calculated in the following way: (price paid for goods in stock)/(the number of goods in stock).
- For sales orders only: If you have the correct user permissions, you can change the cost price on the sales order. This amended cost price is only used to calculate the estimated profit.
Realised profit
The current cost price of an item is used to calculate realised profit. This cost price depends on the costing method The costing method is used to calculate the cost of sales of your stock items, the value of stock, and the transactions posted to your stock nominal accounts. There are four available costing methods. The costing method is specified for each product group. used for each item.
Realised profits are calculated either when the goods are despatched, or when the invoice is posted. This depends on the options you have chosen in the SOP settings.
Note: Returns and credit notes are not included on sales order or invoice profitability reports.
When the realised profit is not calculated
The realised profit is not calculated if goods have been received but the cost price is not known. This can occur is when stock items from purchase orders have been entered as received, but the supplier's invoice has not been processed in Sage 200.
The realised profit for an invoice is adjusted when the cost price for the item is confirmed, i.e. when the purchase invoice is posted.
See How the cost price is calculated.
How the profit is calculated
The profit percentage is calculated using:
- The sale value for each order line. This is the selling price multiplied by the line quantity.
- The cost value for each line. This is the cost price multiplied by line quantity.
You decide how you want this percentage profit to be calculated on the Stock Control Settings | Options tab:
If you have chosen:
-
Calculate as percentage of revenue.
The profit percentage is calculated in the following way:
100 * (issue value - cost value) / (issue value).
-
Calculate as percentage of cost.
The profit percentage is calculated in the following way:
100 * (issue value - cost value) / (cost value).
When the sales profit is calculated for each type of transaction
Quotations and Pro forma invoices
Estimated profit. |
This is calculated when quotations and pro forma invoices are entered. |
Realised profit. |
This is not calculated for quotations and pro forma invoices. |
Sales Orders
Estimated profit |
This is calculated when sales orders are entered. |
Realised Profit |
The realised profit is calculated when the sales order is entered for certain types of stock item:
Note: The confirmation of despatch for |Service / Labour and Free Text items is set in the Stock Settings. |
Sales despatch
Realised Profit |
This depends on the options you have selected in the SOP settings. If you have chosen:
|
Amend Despatch
Realised Profit |
This depends on the options you have selected in the SOP settings. If you have chosen:
|
Post Invoice
Realised profit |
This depends on the options you have selected in the SOP settings. If you have chosen:
|
Stock Adjustments (Goods In)
Realised profit |
For sales orders where the cost of the goods is not known, the realised profit is adjusted when stock is added into Sage 200 with a confirmed price. |
How the cost price is calculated
Free text lines
A notional cost price can be entered with each free text line. To do this, edit the line and enter the required cost price.
This cost price is used to calculate both the estimated and realised profit.
Additional charge lines
A notional cost price can be set on each additional charge record or can be entered with each charge line. To do this, edit the line and enter required cost price.
This cost price is used to calculate both the estimated and realised profit.
Invoice items
A notional cost price can be set of each item record. This can be changed when the item is added to an invoice. To do this, edit the line and enter the required cost price.
This cost price is used to calculate both the estimated and realised profit.
Stock items
The cost price is calculated differently depending on the costing method used for the stock item.
Costing method | Description |
---|---|
FIFO |
See an example
|
Standard | The cost price specified on the stock item record. |
Average | The current average cost price. |