Hello friends,
I need to create a custom report like: inventory profit margin but I need to add two expenses accounts.
Can you help me with some SQL here?
Thank you!
What do you mean by “I need to add two expenses accounts?” Inventory profit margin has nothing to do with expense accounts. It reflects the difference between average cost of inventory items sold and selling prices.
maybe OP, like me, keeps a freight in account separate from purchases.
I have a cost that is PayPal commision and other similar to this, but is a cost, not a expense, I want to know the margin discounting this two commisions
In accounting, cost and expense mean the same thing. Trying to distinguish between them is pointless.
It may seem useful to you to adjust margin calculations for commissions or other expenses. But where would you stop? Are you going to allocate rent on your warehouse space and deduct that, too? What about utilities and insurance? How about the cost of any employee benefits? All those things are costs/expenses of doing business and selling the inventory.
This is why accountants traditionally subtract inventory’s direct cost from the revenue it generates to calculate gross profit first. Then they subtract all the other operating expenses to calculate operating profit. And finally, non-operating expenses are subtracted to yield net profit.
Besides, there are more direct ways of handling commissions. If a customer pays 100 total for an inventory item, and you pay a sales person 5% commission, the receipt would be divided and posted 95 to Inventory - sales and 5 to Commissions. The Inventory Profit Margin report would thus be adjusted for the commission. The point of the report, after all, is to know how much margin you make on the sale of inventory, not how much margin on gross revenue.
Dive into the world of ratio’s and key figures and indicators and you will see there is a huge difference between costs and expenses.
Deprecations are costs, no expenses. No money is leaving your bank account.
Rent for a building are expenses, money is indeed leaving your bank account.
We could argue about semantics to no purpose. Current depreciation is an expense in accounting. There are only two categories of accounts on the profit and loss statement: income and expense. Cost does not appear.