How Much Profit Per Order Do You Make?

 In Best Practices, Business Intelligence

At the most basic level, your profit per order is the cost of goods sold subtracted from your selling price. However, that leaves many costs out of the equation.

While some metrics may try to quantify a businesses’ fixed and variable costs to determine a true cost, this article will focus only on the variable costs for a particular order. Besides your initial purchase cost from your vendor, there can be other factors, such as freight, tariffs, taxes, and rebates.

SalesPad Desktop provides a solution to this oversimplified and inadequate equation through our Sales Document Profitability screen.

This screen allows you to manipulate either the gross margin percent for the whole sales document or the individual fields of a sale line, such as selling price, gross margin dollars, or gross margin percent.

While there are multiple use cases for this screen, one of the most common is for a sales representative to be able to make on-the-fly price adjustments. These adjustments can be done while maintaining a certain profit level either by margin or by overall dollars on the sales order. Additionally, SP Desktop shows you the latest receipts to help a user see if the cost of a particular good is trending higher or lower.

Recently, a client asked SalesPad to factor customer rebates when calculating gross margin. Through the use of its custom development team, it wrote a modification to the Profitability screen to allow this client to set a customer rebate amount on a sales line (as seen in the image below). The new cost is now calculated by adding the original purchase cost and the customer rebate together. The combined cost is then utilized when calculating gross margin in the Profitability screen.

Do you want to know how profitable each document is based on your business calculations?

Contact SalesPad about using the existing Sales Document Profitability screen, or have SalesPad write a screen that is designed specifically for your business.

Joe Alt

Recommended Posts

Leave a Comment

Start typing and press Enter to search