Many iSOFT clients are needing to adjust their pricing to maintain margins in the face of increased labor and raw material costs.
This month we’d like to provide an overview of the built-in AccountMate pricing logic functionality—along with some common enhancements you might find useful.
➤ First, AccountMate’s Profit Margin Report in the AR module is indispensable. It allows you to analyze your price, cost and margin in a myriad of ways.
➤ Second, AccountMate’s Landed Cost functionality lets you include your increased shipping cost in your item cost, directly helping your sales/profit analysis on a per-item basis.
“Landed Cost“ includes the cost of shipping in inventory onhand value. As an example, if you buy a coffee mug for $1.00 and pay $0.50 in shipping to get it to your facility, is the mug valued at $1.00 in inventory with $0.50 of shipping expense, or is the mug valued at $1.50 in inventory? Either answer is valid, but if the cost of shipping is “large” compared to the cost of the item then it’s more common to include the shipping cost so you can easily see the complete cost in the AR Profit Margin Report.
Since the cost of international shipping has increased SUBSTANTIALLY in recent months, this has become a more pressing issue for clients who import goods and/or raw materials. Fortunately, AccountMate has built-in functionality for landed cost. Learn more about Landed Costs in AccountMate.
Now let’s get to pricing as promised.
AccountMate provides flexible pricing functionality—allowing you to define pricing on a granular level to satisfy your customers’ demands and maintain the margins necessary. In order of priority, meaning the first one encountered will be selected, the pricing levels include:
- Customer-Specific Pricing: This is usually the lowest pricing and only applies to a small number of customers. This is used sparingly as it can be tedious to maintain specific pricing for every customer for every item.
- Group/Quantity Pricing: Item pricing can be defined for “Customer Groups” (such as bronze, silver, gold) or can be defined for quantities (1-9 are $1.00 each, 10-19 are $0.95 each, 20+ are $0.92 each). These can even be combined for quantity price breaks within customer price groups.
- Unit of Measure Pricing: Analogous to quantity price breaks, you can define pricing for the same item being sold in different units of measure such as $1.00 “EACH” or $5.50 “6PACK” or $20.00 “CASE24”.
- Special Pricing: This is best characterized as “Limited Time Sale Pricing,” allowing you to define pricing that’s only available for a specific time period—yes, with a start date and end date.
- Unit Price: Also called “List Price” or MSRP, this is the default price if no other condition applies.
Need More? While the built-in pricing methods cover most scenarios, we have the flexibility to get more complex with customization. Two common modifications are to combine different items in the quantity price breaks (e.g., if you order six regular and six diet, you get the quantity pricing for twelve on both items), and to define different price groups for different inventory classes, groups or product lines for the same customer (e.g., customer is “gold” for two classes, “silver” for another class, and has no price group defined for the remaining item classes so they would receive unit/list price for those).
Finally, besides ensuring consistency in the pricing your customers receive, having pricing defined in the system also accelerates the order entry process—particularly with newer employees who otherwise might have to manually look up pricing from outside sources. Thus, in addition to improving your margin, your overworked sales staff will thank you for making their job easier.