Pricing
This document discusses general pricing in Microbizz, covering InventoryTodoItem, InvoiceExportLine and SalesContractLine.
Saved price properties
When a price is saved for each of the above objects it consists of these fields:
| Item price | The sales price pr. item |
|---|---|
| Cost price | The cost price pr. item |
| Discount percentage | A discount percentage between 0 (no discount) and 100 (free) |
These values shouldn't be recalculated by the system, when first assigned, but should only be modified by user input.
Calculated properties
From the saved properties, we can calculate additional properties
| Profit margin | This is the relation between the item price and the cost price as a percent. It is calculated as: CM = (IP-CP) / IP. If an item have a cost of 75,- and a price of 100,- the profit margin is (100-75)/100 = 0.25 = 25 % |
|---|---|
| Final item price | The final item price, which is the price expected to be payed for the item, is IP * (100-DP). If an item have a price of 100,- and a 40 % discount, the final item price is 100,- * (100-40) % = 60,- |
Profit margin in the interface
If a profit margin field is included in the interface for one of the above objects, it is only a calculation field, which can either show the relation between the cost price and the item price, or calculate a new item price to be stored. The profit margin is never saved on a line, as it can always be calculated.
Creating lines
When creating a line, we need to store three informations: Item price, Cost price and Discount percentage. Customer specific settings are always read from the customer intended to receive the line.
Cost price
On an EDI the cost price is the price payed for the item. Otherwise the cost price is read directly from the product catalog, if a product is present. If a product isn't present the cost price is zero.
Item price
The item price is calculated based on the profit margin stored in the general or customer specific settings. The profit margin can be applied either on the cost price, or the list price (setting), and is calculated as follows: Source price / (1-profit margin) , so if the source price is the cost price, the cost price is 75,- and we have configured a profit margin of 25 %, then the calculated price will be 75,- / 75 % = 100,-
Discount percentage
The discount percentage is taken directly from the customer discount configuration (if any).
Behavior and interaction when editing fields
In the full setup, describing a price line, one can have the following fields:
Count
Cost price
Item price
Profit margin
Discount
Total line price
Count
Calculation: The count is never calculated.
Manual update: If the count is updated manually, a new total line price is calculated.
Cost price
Calculation: The cost is never calculated.
Manual update: If the cost price is updated manually, a new profit margin is calculated.
Item price
Calculation: The item price can be calculated. It is calculated as cost price / (1-profit margin), so if the cost price is 75,- and the profit margin is 25 % then the item price is 75,- / 75 % = 100,-
Manual update: If the item price is updated manually, a new profit margin is calculated.
Profit margin
Calculation: The profit margin can be calculated. It is calculated as 1 - (cost price / item price) , so if the cost price is 75,- and the item price is 100,- then the profit margin is 1 - (75 / 100) = 25 % .
If the item price is 0 this will cause division by zero. In this case we leave the field empty.
Manual update: If the profit margin is updated manually, a new item price, and total price is calculated.
Discount
Calculation: The discount field is never calculated.
Manual update: If the discount field is updated manually, a new total price is calculated.
Total line price
Calculation: The total line price is calculated as count * item price * discount .
Manual update: The total line price field should be read-only.