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Profit Margin

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The Sales manager is responsible to specify the level of profit margin control to be applied to sales of all items linked to a product.

The manager thus specifies, via this tab, the rules for profit margins and minimum targets for profit margins per sales order type. The Sales manager also applies settings on the tab "landed cost calc parameters" to governs the landed cost base from which profit margins are calculated.

 

The options vary from "no control", to warnings only or to the extreme where the transaction will be stopped if the minimum profit margins are not met.

 

The desired percentages are variable per sales type and the order line status also comes into play.

 

When transactions are stopped, the sales manager and other authorized employees can still override predefined sales prices or profit margins and can also grant an authorization to other employees via the Sales price and GPM override authorization function.

 

On this tab the following fields can be viewed:

 

hmtoggle_plus1Apply

The "Apply" button is only enabled if the signed on user is the Sales Manager or Acting Sales Manager.

 

When the "Apply" button is clicked, the fields gross profit margin enforce, stop order type, warn order type, apply stop status, apply warn status, override product manager, override sales manager, override order sales person, override product scheduler, force allocate x-ref pre release, gross profit margin warn percentage, gross profit margin stop percentage, on the Product Master table are updated for the selected product code.

hmtoggle_plus1Enforce Gross Profit Margin

This field governs the amount of sales control to be applied when sales order lines for a specific product is added or maintained via the Customer Orders and Sales Order Wizard functions. It also applies to Over the Counter sales performed via the Stores to customer movement. The settings governs the minimum desired gross profit margin percentage that should be yielded from the various sales types and can either warn the user or prevent the transaction from being processed.  The options areas follows:

 

Not Applicable

This is the default.  If this option is selected, all the other sales control fields are disabled except the option "Enforce Allocate or X-Ref Before Release of Sales Order". This option implies that no control is required and that even if sales order lines or counter sales are performed by applying sales prices that will yield little or no profit, the transaction may proceed.

 

Apply Warn Percentage Only

If this option is selected, only the "warn options" are enabled. This option implies that at least some level of control is required and that in scenarios where the insert/update of sales order lines or counter sales are performed by applying sales prices that will yield less profit for the sales type than the specified warn percentage, the user will be warned of this condition but will not be prevented to proceed.

 

Enforce Stop and Warn Percentages

If this option is selected, all the options are enabled. This option implies the that strictest level of control is required and that scenarios where the insert/update of sales order lines or counter sales are performed by applying sales prices that will yield less profit for the sales type than the specified warn or stop percentage, will warn the user of this condition or stop the user to proceed if the percentage is less than the stop percentage.

 

The rules can selectively be applied on certain order line statuses only. Only the Sales manager or an authorized employee can override these conditions. Other users will require a sales price and GPM override authorization to sell goods at lesser prices or profit margins.

 

Only the Sales manager or his/her Acting for person has change rights on the "Sales Control" tab.

hmtoggle_plus1Enforce Options

Selections in this frame will prevent the user from entering sales order lines or performing counter sales if the calculated GPM-% is less than the minimum Gross Profit Margin % indicated in the Gross Profit Margin Stop Percentage field.

 

Different percentages may be set for spares, products and projects (Also see the Customer Line Type help). These percentages can be set to apply to certain or all order statuses.

 

The percentage fields will be enabled when the corresponding check box is selected. The default value in the percentage fields will be '0'. The maximum percentage value is '999'. Stop percentages must be less than or equal to warn percentages.

hmtoggle_plus1Warn Options

Selections in this frame will warn the user when entering sales order lines or performing counter sales if the calculated GPM-% is less than the minimum Gross Profit Margin % indicated in the Gross Profit Margin Warn Percentage field.  Warn percentages must be equal or greater than stop percentages entered.  The percentage fields will only be enabled when the corresponding check box is selected. The default value in the percentage fields will be '0'. The maximum percentage value is '999'.