Profit on sales orders and quotations
When entering sales orders and quotations, you can view the sales profit for the whole order or individual items in the order.
How to view profit
You can view the estimated and realised profit level for individual items, or for the whole order or quotation.
Note: To view profit, you must have View profit values on invoices and orders set in your User Permissions (
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To view profit for the whole sales order, select the Order Details tab, then select Show Order Profit.
To view profit for the whole quotation, select the Quotation Details tab, then select Show Quotation Profit.
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To view the profit for an item in an order, select the Order Details tab, then select More actions > Profit on the item line.
To view the profit for an item in a quotation, select the Quotation Details tab, then select More actions > Profit on the item line.
The profit can be calculated as either a percentage of revenue or a percentage of cost, which is set in the Stock Control Settings - Options tab (
Note: Profitability is calculated on a line-by-line basis. For this reason, profitability figures reflect line discounts, but not order or invoice discounts.
All values are displayed in the order's currency.
Estimated and realised profit
Two profit values are calculated for sales orders - estimated and realised.
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Estimated profit is calculated when the order is entered, and can be calculated for sales orders and quotations.
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Realised profit is calculated when goods are despatched, so can only be calculated for sales orders.
Estimated profit
Estimated profits are calculated when a sales order or quotation is entered.
The following cost prices are used to calculate estimated profit:
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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. The costing method used for a stock item is specified in its product group, this is the standard cost price.
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For stock items using the FIFO or Average 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).
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For sales orders only: You can change the Unit cost price for a sales order item, if you have the appropriate User Permissions
Realised profit
Realised profits are calculated either when the goods are despatched.
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. The costing method used for a stock item is specified in its product group used for each item.
When the realised profit is not calculated
The realised profit is not calculated if goods have been received but the cost price of the stock item 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 (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 in the Stock Control Settings | Options tab
If you have chosen:
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Calculate as percentage of revenue.
The profit percentage is calculated in the following way:
100 * (issue value - cost value) / (issue value).
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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
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Estimated profit: Estimated profit is calculated when quotations are entered.
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Realised profit: Realised profit is not calculated for quotations.
Sales orders
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Estimated profit: Estimated profit is calculated when sales orders are entered.
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Realised profit: The realised profit is calculated when goods are despatched, using Despatch
Note: If you amend the quantity despatched, using Amend Despatch, the realised profit is increased or reduced according to your adjustment, using the cost price of the stock item.
Sales despatch
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Realised profit: The realised profit is calculated for all items requiring confirmation of despatch, using the cost price of the stock item.
The realised profit is not calculated if the cost price of the goods is not known.
Amend despatch
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Realised profit: If you increase the quantity despatched, the realised profit is adjusted using the cost price of the stock item.
If you reduce the quantity despatched, the realised profit is reduced.
Post invoice
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Realised profit: No changes are made to the realised profit.
The realised profit is not calculated if the cost price of the goods is not known.
Stock adjustments (goods in)
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Realised profit: For sales orders where the cost of the goods is not known, the realised profit is adjusted when stock is added with a confirmed price.
How the cost price is calculated
Standard stock items
The cost price is calculated differently depending on the costing method used for the stock item.
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FIFO.
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Estimated profit: Uses the average cost price, unless the cost price is changed on the invoice. Then the amended cost price is used.
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Realised profit: Uses the earliest price paid for the stock items divided by the number of items.
Example of FIFO-
You buy ten items at £10 each.
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You buy an additional five items at £15 each.
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You now have 15 items in stock.
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You sell seven items.
The estimated unit cost is 11.67. This is the average cost price of all the items bought so far: ((10 items x £10) + (5 items x £15)) / 15.
The realised unit cost is £10. This is earliest price paid for the goods divided by the number of goods: (7 items x £10) / 7.
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You sell the remaining eight items.
The estimated unit cost is £11.67. The average cost price hasn't changed as you haven't bought any more items.
The realised unit cost is £13.12: ((3 items x £10) + (5 items x £15)) / 8.
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Standard: The cost price specified on the stock item record.
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Average: The current average cost price.
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.
Sales order and 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.