Profit analyses: How to analyse sales against sales expenses?

Experienced Cover User shau
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Profit analyses: How to analyse sales against sales expenses?

I would like to know how it is possible to link sales and sales expenses, such that I can calculate the profit margin (the difference = sales minus all sales expenses and taxes). 

 

So I would record purchase expenses on certain goods from a supplier which go towards the fulfilment of this sale, then add on all other costs of sales incurred to me, the seller.  These costs are not only recorded under the Cost of Sales account but typically are recorded over various accounts - the sum of all the component costs across various expense accounts is of interest here.

 

Now I would like to calculate my profits for this particular sale, and then for all my sales and obtain some statistics: averages, ranges, standard deviations, etc over a nominated period.

 

I would like a quick way to view profits for any given sale.  And then a way to analyse profits.

 

Does MYOB provide this functionality?

 

For technical reasons, I can't put all my sales expenses into Cost of Sales.  The actual expenses incurred in fulfilling this sale are recorded across various accounts under different account types.

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Super Partner Jennifer_Kelly
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Re: Profit analyses: How to analyse sales against sales expenses?

Hi @shau 

 

The MYOB Jobs functionality is designed to do exactly what you are asking for.

 

You setup a Job card for each new Job/Project/Sale that you wish to track profitability for, then simply allocate that Job number to each line of each transaction that you wish to track:

  • Sales Invoice - any sale of inventory will automatically allocate the COS to the job
  • Purchases
  • Payroll
  • Journals

You can then run Job P&L reports to see the Profit on each Job. You can also apply a budget for each Job and compare the Actual to the Budget.

Jobs can be grouped together with Job Headers, by the Job Customer or the Job Manager for reporting and analysis.

 

See this link for help on setting up and using jobs in MYOB - http://help.myob.com/wiki/display/ar/Jobs

 

If you have many jobs and need more advanced reporting over your jobs data as you had described then you might also want to look at some of the MYOB Add-on solutions to help with Jobs reporting.

 

As an example of the types of reporting you can do over MYOB Jobs data using our Business Intelligence solution BI4cloud see the following:

I hope that helps.

Jennifer Kelly CA
BI4Cloud- powered by Interactive Reporting
02 8011 1511
www.BI4Cloud.com
Experienced Cover User shau
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Re: Profit analyses: How to analyse sales against sales expenses?


@Jennifer_Kelly wrote:

Hi @shau 

 

The MYOB Jobs functionality is designed to do exactly what you are asking for.

 

You setup a Job card for each new Job/Project/Sale that you wish to track profitability for, then simply allocate that Job number to each line of each transaction that you wish to track:

  • Sales Invoice - any sale of inventory will automatically allocate the COS to the job
  • Purchases
  • Payroll
  • Journals

You can then run Job P&L reports to see the Profit on each Job. You can also apply a budget for each Job and compare the Actual to the Budget.

Jobs can be grouped together with Job Headers, by the Job Customer or the Job Manager for reporting and analysis.

 

See this link for help on setting up and using jobs in MYOB - http://help.myob.com/wiki/display/ar/Jobs

 

If you have many jobs and need more advanced reporting over your jobs data as you had described then you might also want to look at some of the MYOB Add-on solutions to help with Jobs reporting.

 

As an example of the types of reporting you can do over MYOB Jobs data using our Business Intelligence solution BI4cloud see the following:

I hope that helps.


@Jennifer_Kelly  Thanks - that was helpful, Jennifer.  So I could use the MYOB jobs function for goods rather than services without any problems that you can foresee?  (As far as it affects tax or anything else.)

Super Partner Jennifer_Kelly
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Re: Profit analyses: How to analyse sales against sales expenses?

HI @shau 

 

No, MYOB Jobs should work for both Services and Products based businesses.

 

Many of my clients sell products with a service component for example sell an Airconditioning system that includes instalation labour or subcontract costs so they want to see the true profit of each job including the GP on the Aircon itself and the profit after all associated labour and costs have been taken into account.

 

If on the other hand you just sold inventory and did not have other costs associated with the sale other than the cost of the item that you needed to track then you would not need to go to the extra effort of using Jobs. You can do some simple GP and margin analsyis over Item sales in MYOB itself and then using an addon like BI4cloud you can do complete Margin analysis by Invoice, by Customer, by Salesperson, by day , by week, by month, by brand, by customer group etc 

See - Sales - Understand your Margins

Jennifer Kelly CA
BI4Cloud- powered by Interactive Reporting
02 8011 1511
www.BI4Cloud.com
Experienced Cover User shau
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Re: Profit analyses: How to analyse sales against sales expenses?


@Jennifer_Kelly wrote:

HI @shau 

 

No, MYOB Jobs should work for both Services and Products based businesses.

 

Many of my clients sell products with a service component for example sell an Airconditioning system that includes instalation labour or subcontract costs so they want to see the true profit of each job including the GP on the Aircon itself and the profit after all associated labour and costs have been taken into account.

 

If on the other hand you just sold inventory and did not have other costs associated with the sale other than the cost of the item that you needed to track then you would not need to go to the extra effort of using Jobs. You can do some simple GP and margin analsyis over Item sales in MYOB itself and then using an addon like BI4cloud you can do complete Margin analysis by Invoice, by Customer, by Salesperson, by day , by week, by month, by brand, by customer group etc 

See - Sales - Understand your Margins


@Jennifer_Kelly  Most of my sales would look something like this:

 

Sales income:

  • Customer pays for goods
  • Customer pays for cost of shipping

Both of these will be recorded in the same sales record.

 

Sales expenses:

  • I pay my supplier for the goods.
  • I pay PayPal a transaction fee
  • I pay an e-marketplace fee
  • I pay an advertising fee
  • I pay GST tax

These are recorded under different accounts as purchase records with various suppliers.

 

In that case, would tracking with Jobs be the best way to go about profit determinations?  Or would tracking using the simpler method you suggest be viable?

Experienced Cover User shau
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Re: Profit analyses: How to analyse sales against sales expenses?

@Jennifer_Kelly 

Also, I am having this problem with using the MYOB Jobs solution you described, which I have posted in as a separate thread:

https://community.myob.com/t5/AccountRight-Getting-started/Job-coding-for-freight-finance-etc/m-p/58...

Super Partner Jennifer_Kelly
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Re: Profit analyses: How to analyse sales against sales expenses?

Hi @shau 

 

It may depend on the size of your individual Orders/sales and the volume as to whether it is worth the extra effort to setup a Job for each and every one. A Smaller number of Large $ Sales may be worth it but if you have a lot of volume then I probably would not consider it if you are selling Items from Stock.  

 

You say you pay your supplier, if you purchase the products into stock then MYOB will already attach the COS of the stock to each sale so there may not be a need to use Jobs.

 If you do not purchase into stock then using jobs would be the only want to associate the cost of the product with the Sales revenue.

 

Other costs you mention, Paypal, advertising and e-market place may not be easy to split out invoice by invoice so may also be hard to allocate out to individual Jobs? Often these costs are likely to be a fixed or a similar % based on the Sale price. In that case if you want to achieve a net GM% of say 50% and your Paypal and e-market place fees are say on average 10% of the Sales value  then you should simply aim for a 60% GM% on the  raw sale of the product.  

 

While from a purely technical point of view you may want to allocate these costs down to each and every invoice you need to ask if this is worth the effort or can you analyse and monitor these at a higher level. For example Group all E-Bay Sales together and then analyse all of the E-bay and related costs to assess overall profitability of this Market place and so on. You may just want to have a Job for E-Bay for example  and put all Sales and all Costs related to Ebay sales to the one job E-Bay. Then you could run a P&L to see how Profitable selling via Ebay is after you take into account the various costs.

Jennifer Kelly CA
BI4Cloud- powered by Interactive Reporting
02 8011 1511
www.BI4Cloud.com
Experienced Cover User shau
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Re: Profit analyses: How to analyse sales against sales expenses?

I do not carry stock or inventory my items.  They are purchased on demand.  I don't use the cost of sales account for some technical reason that I don't fully understand myself.
 

I have many small sales.

It does seem like a lot of effort but the margin information on a per product level is quite strategically valuable to know...  If there were a plugin that made the process less laborious...

I still need help with a solution. Anyone know any plugins that streamline jobs/projects/sales accounting or profitability reporting?
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