Answer: For companies that operate on Gross Margin (GM), it is possible to update inventory prices based on their costs. Like this, if the cost for an item increases or decreases, then so too can the wholesale price that it’s sold to the company’s customers at. To begin this process, let’s first look at how to set up Gross Margins within Solid Business Central.
To Set Gross Margins:
The Gross Margin that the inventory items are to be sold at is controlled within the Department Records.
- In Solid Business Central, navigate to [Datafile / Department / View], and display whichever department of items to begin with. By using [F2 – Edit] to make changes to this record, values can then be added to the ‘Margins %’ area.
- The ‘GM’ field controls the Gross Margin of profit that the company should make on all items belonging to this department. If the GM is set to 25.00 for example, for a 25% Gross Margin, then the system will suggest wholesale prices for these items so that they will yield at least a 25% GM profit for the company.
- Similarly, the ‘LG’ Low Gross field next to this can be used to restrict the minimum profit margin that an item can be sold for. Attempting to sell below this Low Gross (LG) amount from within Solid Business Central will result in a warning being issued to the employee informing them of such.
- Once the ‘GM’ and ‘LG’ have been set, use [CTRL+END] to save the changes, and continue setting up the rest of the departments in the same way.
How Wholesale Prices are Automatically Set:
There are two places in which the wholesale price for items will automatically be suggested based on the GMs set in the departments. The first is when adding a new Inventory Record, once the Department has been set in the ‘Dept’ field, and the ‘Cost’ is entered in, the ‘Whsle’ (or Dealer) field will automatically be set based on the cost plus the Department’s GM. If the GM is left at the default of 00.00, this wholesale price will be set to the ‘Cost’ that was just entered.
The second place that the GM calculation is made is when product is received from suppliers.
- In Solid Business Central, when in the ‘Buying’ screen, create and edit Purchase Orders as would typically be done.
- For Purchase Orders being saved as Finalized Receipts ('Type: R’), when this order is saved with [CTRL+END] the message will show, ‘Product being received, change list prices automatically!’.**
- By answering ‘Y’ for Yes to this question, Solid Business Central will examine the wholesale prices of the items on this PO and compare them to that of the cost plus GM price for those items. Whichever price is greater will be automatically used as the wholesale price for that item to ensure the best profit.
- By answering ‘N’ for No to this question, if there are any wholesale prices that are different than the GM above cost price, a ‘List Price Verification’ window will show for each such item. This allows the employee to stick with the current price by selecting ‘Old Price’, to use the new GM over cost price by selecting ‘New Price’, or set a new wholesale price all together by selecting ‘Edit Price’.
**If this ‘Product being received, change list prices automatically’ prompt does not show automatically, this feature may need to be turned on in the Company’s Configuration. In Solid Business Central, navigate to [System / Configure / Company / Settings], change the ‘Order Price Check’ field to ‘A’ for Advise of Price Change, and use [CTRL+END] to save this change.