The Profit Analysis Report is accessed from the Reports Window, Project Management folder. This report is designed to give both an estimated and actual profit analysis for comparison. The estimated profit is based on the estimated selling price from the Proposal and the estimated cost from the Purchase Order. The actual profit is derived from the Item price on the Client Invoice and the actual cost from the Vendor Invoice.
The Profit Analysis Report can be printed for a number of ranges, including a Project range, Sales Category range, Location range, Employee/Manager range, Proposal range, and Invoice range. The Format Selection menu allows you to select to print the report by Sales Category, Location, Manager, Proposal number, Invoice number, or a Project Summary. You may select to show a full description of the Items or just the first few words of the description. You may also choose to view a Component detail that shows a profit summary by Component Type for each Item. The following is a description of the columns on the report:
Estimated Cost: This is the cost typed in on the Component Window when entering the Component. It is the amount that prints on the PO.
Actual Cost: This is the amount paid to the Vendor. This amount does not include Vendor Deposits paid but only what is paid after the final Vendor Invoice is entered. This amount will be zero until an invoice is entered against a PO from a Vendor. For example, you may estimate that a chair costs $850.00 and then when the Vendor sends you the bill for the chair it turns out that it was on sale and only cost you $800.00. Your estimated cost = $850.00 and your actual cost = $800.00.
Estimated Price: This is the price of the Item as entered in Project Specifications. It is the price that prints on the Proposal to the client. For example: if a chair is estimated at $850.00 with a 30% mark-up then the estimated price would be $1105.00.
Actual Price: This the price invoiced to the client. The invoice price can be the same as the estimate price or can include additional charges or discounts. This price will be zero until the item is invoiced to the client. If Invoice Pricing on the Project Advanced Options Window - Invoice Tab is set to "Always Proposal”, when the client is invoiced for the chair the actual price would be $1105.00. If we pass our savings to the client, by using the "Always Actual" setting, then the actual price would be $1040.00 or $800.00 marked up by 30%.
Estimated Profit: This is the difference between the Estimated Price and the Estimated Cost or the estimated amount of dollars that you will make on the goods. In this example, the Estimated Profit would be $1105.00 - $800.00 or $255.00 profit.
Actual Profit: This is the difference between the Actual Price and the Actual Cost or the actual amount of dollars that you will make on the goods. In the example, the chair actually costs $800.00. If the chair is sold to the client at $1105.00 then a slightly higher actual profit will be recorded as $1105.00 - $800.00 or $305.00 profit.
Gross Profit Percentages: Gross profit is the percentage of profit as compared to the price. GP% = (price – cost) / price or profit / price. A 30% mark-up translates roughly to a 23% gross profit; in the example above $255.00 is 23.1% of $1105.00.
Mark-up Percentages: Mark-up is the percentage that the cost is increased to achieve the price. This is the same as the percentage that you set when entering the specifications to calculate the price from the cost. In the example, $255.00 profit is 30% of $850.00.