Margins are a visible while creating a sales documents and also in your sales report. erplain uses the Moving Average Cost (MAC) method to calculate margin.
Margin and how it is calculated in your sales documents
The margin of a product is determined by:
The margin is always presented as a percentage %.
If your Product A has a sales price of $7 (excluding VAT) and the current MAC (Moving Average Cost) of this product is $1.60, to calculate the margin, we perform the following calculation :
7 - 1.60 = 5.40
5.40 / 7 = 0,7714286
0,77 x 100 = 77%
erplain rounds down the number to 77.1% margin.
For more information on your product's MAC, please click here.
How to see the sales margin of products while creating a sales document
The sales margin can be seen for every product on every sales related documents (estimates, sales orders, invoices). The line item will appear with the bellow logo:
By clicking on this logo, the current Moving Average Cost (MAC) and margin of this product appears.
If the price in the line item is altered, the MAC will remain the same, however the margin will be considerably altered.
Margin and sales reports
Margin on product sales can be seen in the Intelligence menu > Sales reports. These reports are based on specific creation date ranges, pulling together the sales price of every product sale and the current MAC to calculate an over-all margin of sale for every product.
Margin calculation in sales reports
Please see the below calculation of margin in you reports:
Profit = Total sold without tax - Cost of goods sold
Cost of goods sold = Moving Average Cost x Quantities sold
For more information on reports, please check this page.