To properly manage your business you have to know how profitable each of your clients is. You also need to know how profitable each of your products is.
Using a well integrated ERP system should be able to easily produce this information for you.
If you buy and sell products, this is fairly easy to accomplish. If your costs for each sale depends on one or more variable components, this can be more troublesome.
I was recently working with a client that repairs large tires used on heavy duty construction equipment. His competitive angle is that he uses a special material injected into the tires to enhance the durability and increase the longevity of the tires. His challenge was finding an easy way to associate the actual cost of the work to each sale.
The solution didn’t immediate present itself. But after a little consideration I came to this solution:
I used the Sales Kit functionality in Dynamics GP to handle this issue. The sales kit contained primarily the special material that is injected into the tires. In order to capture the actual cost of each sale, all that needs to be done is to adjust the quantity of the injection material that was actually used for each sale. This is a good solution because it allows the sales order item to have specific information about the work, e.g.” repair and fill 45″ tire”, but allows the actual cost of the material used to be recorded and costed with the sale.
This video shows an easy way to track actual costs that may vary from order to order. This shows basic Dynamics GP functionality and can be easily setup and used: http://youtu.be/lZLb-_DUPwo