Gross Profit

SAP Business One lets you calculate the gross profit for sales documents according to the method you define during application configuration. The gross profit for each document row is calculated and then totaled for the entire document. Gross profit can be calculated for documents of Item type and for documents of Service type.

To calculate the gross profit in a sales document, from the tool bar choose the (Gross Profit) icon.

Gross profit calculation is available for the following documents:

Sales Quotation
Sales Order
Delivery
Return
A/R Invoice, A/R Reserve Invoice, A/R Invoice + Payment
A/R Correction Invoice and A/R Correction Invoice Reversal
A/R Credit Memo (only if not based on A/R Down Payment Invoice)

Note Note

Gross profit calculation is active only if you have selected the Calculate Gross Profit checkbox in Administration System Initialization Document Settings General .

End of the note.

Gross Profit of [Document Name] Window Fields

The fields and information displayed in the Gross Profit for [Document Name] window vary according to the document type: Item or Service.

Fields for Document of Item Type

Note Note

This topic documents fields and other elements in this window that either are not self-explanatory or require additional information.

End of the note.

Base Price By
Displays the base price in accordance with the price list. The default value is defined in Administration System Initialization Document Settings General Calculate Gross Profit Base Price Origin . If required, you can choose a different price list. Other additional prices are: Last Purchase Price – the last price at which you bought the item. Last Evaluated Price – the price calculated in the last run of the inventory audit report. Note If your company manages non perpetual inventory, the name of this report is Inventory Valuation Report. End of the note. Item Cost – the current item cost in the relevant warehouse; see Item Master Data Inventory Data . Note This option is available only in companies who manage perpetual inventory system. End of the note.

Base Price
The base price of the item as defined (or calculated) in the price list selected in the Base Price By field, multiplied by the Items Per Unit quantity in the sales document. If you change this value manually, the values in Total Base Price, Gross Profit, Profit %, and Base Price By fields are updated accordingly. You can update the base price in all of the sales documents even after the document has been closed. The only exceptions are A/R correction invoice where the base price is a read-only in the Was table, and A/R correction invoice reversal, in which the base price is a read-only as well.

Total Base Price
The total amount of the base price for gross profit calculation. If you change this value manually, the values in the Base Price, Gross Profit, Profit %, and Base Price By fields are updated accordingly. If the quantity in the document is updated, the total base price is recalculated by multiplying the base price by the updated quantity. You can update the total base price in all of the sales documents even after the document has been closed. The only exceptions are A/R correction invoice where the total base price is a read-only in the Was table, and A/R correction invoice reversal, in which the total base price is a read-only as well. Note The following rules apply when the base price is by Item Cost: In sales documents that create inventory posting (such as Delivery), the total base price equals to the amount posted to the Cost of Goods Sold account. When partially drawing a delivery into A/R Invoice, or a return into A/R Credit Memo, the total base price equals the relative portion of the total base price in the base document, based on the drawn quantity. Example Delivery with Quantity = 10 and Total Base Price = 33.6 is partially drawn into A/R invoice. Drawn quantity = 6.28. The total base price in the A/R invoice is calculated as follows: 33.6 * 6.28/10 = 21.1008 End of the example. Total base price of parent items in Sales BOM for which price and total are displayed for parent item only (defined in Administration System Initialization Document Settings For a Sales BOM in Documents, Display: section ) and Assembly BOM is the sum of all of their components' cost. In case the valuation method for the parent item is Standard, and standard price (different from zero) is defined (in Item Master Data Inventory Data tab Item Cost field ) the standard cost is used. For Sales BOM, in case the price for component items is displayed, the Base Price, Total Base Price, and Base Price By fields are blank and disabled. When drawing A/R invoice into A/R correction invoice, the total base price equals the amount posted to the Cost of Goods Sold account by the original A/R invoice. End of the note.

Gross Profit
SAP Business One calculates the difference between the sales price and the base price for each item in the sales document. If the result is negative, the row is highlighted in red.

Profit %
SAP Business One calculates the gross profit in percent. When you configure the application, you can choose between two different calculation methods: The gross profit can be displayed on the basis of the ratio of the gross profit to the sales price of the item. The gross profit can be displayed on the basis of the ratio of the gross profit to the cost price of the item. If you change data in this window, confirm your changes by choosing Update and OK. Note When you configure SAP Business One, you can set it up so that an internal mail is sent automatically to specific users when a particular gross profit is exceeded. End of the note.

Base Price By
Indicates the way the base price in the row has been calculated. If you change the value in the Base Price field or the Total Base Price field, the value in the Base Price By column is set automatically to Manual. When selecting any of the options available in the dropdown list, the values in the Base Price, Total Base Price, Gross Profit, and Profit % fields in the row, are updated accordingly. Note By default this column does not appear in the Gross Profit window. To display it, select this column in from the Form Settings — Gross Profit for [document name] Window. End of the note.

Fields for Document of Service Type

Default Gross Profit %
The default gross profit percentage for documents of service type, as defined in: Administration System Initialization Document Settings General Tab Default Gross Profit % for Service Documents field . If you change this percentage manually, the Profit % field in the table is updated accordingly, and gross profit of all of the rows appear in this window is recalculated. When drawing the document into target document, the percentage defined in this field is drawn to the target document. When drawing multiple service documents with different Default Gross Profit % values, the percentage appears in the Default Gross Profit % field in the target document, is taken from Administration System Initialization Document Settings General Tab Default Gross Profit % for Service Documents field .

Service
The description of the services as appears in the sales document.

Total Base Price
The base price of the service. This value is calculated based on the total amount of the service as entered in the sales document, and according to the default gross profit percentage defined in Administration System Initialization Document Settings General tab Default Gross Profit % for Service Documents field . You can change the total base price manually. The values in the Gross Profit, Profit %, and Base Price By fields in the row are updated accordingly. When drawing the document to a target document, the total base price is drawn to the target document. If you have changed manually the total base price in the base document, the updated value is drawn to the target document. If you draw only part of the row from the base document, the relative portion of the total base price is drawn to the target document. The total base price in the target document is calculated as follows: Target Document Total Base Price = Target Sales Price * Base Document Total Base Price / Base Document Sales Price Example Base Document: Sales Price = 1000 Total Base Price = 336 Target Document: Drawn Sales Price = 628 Total Base Price = 211.008 (= 336*628/1000) End of the example.

Sales Price
The sales price of the service as appears in the sales document, before tax and after discount.

Gross Profit
The gross profit amount calculated by subtracting the Total Base Price from the Sales Price. If you change the Total Base Price the Gross Profit amount is updated accordingly.

Profit %
The percentage of the gross profit, calculated by dividing the Gross Profit by either the Sales Price or the Base Price, depends on the calculation method selected in Administration System Initialization Document Settings General Tab .

Base Price By
Indicates the way the gross profit in the row has been calculated: Percentage — the gross profit has been calculated according to the percentage defined in the Default Gross Profit % field. Manual — indicates that you have manually changed the total base price in the row (the gross profit amount and gross profit percentage are updated accordingly). To return to the original calculation, select from the dropdown list the option Percentage. Note By default this column does not appear in the Gross Profit window. To display it, select this column in from the Form Settings — Gross Profit for [document name] Window. End of the note.