Profitability Scorecards Module

The Profitability Scorecards module provides you with comprehensive data analysis tools that you can use to compare vital profitability data for your customers, suppliers, and products. This module can help you quickly analyze all the data that affects your margin, such as advertising and return allowances, chargebacks, commissions, and royalties.

The Profitability Scorecards module includes the following submenus and programs:

Processing Processing

Inquiries Inquiries

Analysis Analysis

Module Setup Module Setup

For information on setting up the Profitability Scorecards module, see Setting Up Profitability Scorecards.

Profitability Data

Some data is added to the Profitability Scorecard module during posting and some is added during record creation. The following table summarizes when data is added to the module.

Data	Added
Absorptions	When running Accounts Receivable Post
Chargebacks	When created, edited, resolved, redistributed, written-off, etc.
Commissions	When posted to accounts receivable
Cost Adjustments	When posted in Inventory Adjustment Post Note For examples of profitability for cost adjustments see Cost Adjustment Profitability Examples.
Cost of Goods	When posted to accounts receivable
Customer Allowances	When posted to accounts receivable
Discounts	Supplier Profitability: When the voucher is entered Customer Profitability: When the discount is applied in Payment Apply
Finance Charges	When running Accounts Receivable Post
Inventory Adjustments	When quantities adjusted in Inventory Quantity Adjust
Invoices	When posted to accounts receivable
Journal Entry Lines	When posted to the general ledger
Miscellaneous Charges	When posted to accounts receivable
Miscellaneous Deposits	When created in Miscellaneous Payment
Purchase Price Variance	When the voucher is posted
Royalties	When posted to accounts receivable
Sales Prices	When posted to accounts receivable
Standard Cost Variance	When the purchase order receipt is posted
Vouchers	When entered or edited
Write-offs	When created

Refreshing Customer Profitability Data

Customer profitability data should be refreshed when a user changes one or more of the following:

billing customer’s profit group
profit group’s code
profit category code
profit subcategory code
Whether data is stored by month, period, or both
profit categorization/calculation of one of the following:
- products
- order classes
- additional charges
- write-off reasons
- general ledger accounts

For information on refreshing customer profitability data, see Scorecard Data Refresh.

Cost Adjustment Examples

The following examples illustrate profitability for standard and average cost products.

Standard Cost Example

Product A has a standard cost of $60.

Transaction	General Ledger Impact	Profitability Impact
1000 units of Product A are received with a landed cost of $70 per unit.	Dr Inventory $60,000 Dr Standard Cost Variance $10,000 Cr Accounts Payable Clearing $70,000	-10,000.00
A customer orders 100 units of Product A at $90 per unit. A sales order and invoice are processed.	Dr Accounts Receivable Trade $9,000 Cr Sales $9,000 Dr Cost of Goods Sold $6,000 Cr Inventory $6,000	3,000.00
It is decided that the standard cost of Product A is no longer accurate (based on the most recent purchase order). The standard cost is updated to $70. The profit on the prior sales order should only have been $2,000. A cost adjustment is entered.	Dr Inventory $9,000 Cr Standard Cost Variance $9,000	900 units * 10 = 9,000.00

The standard cost variance account balance is now Dr $1,000.

Net profitability is $2,000.

New sales orders will use the $70 standard cost and impact profitability when invoiced.

Average Cost Example

Transaction	General Ledger Impact	Profitability Impact
1000 units of Product B are received with a landed cost of $50 per unit.	Dr Inventory $50,000 Cr Accounts Payable Clearing $50,000	0.00
A customer orders 100 units of Product B at $90 per unit. A sales order and invoice are processed.	Dr Accounts Receivable Trade $9,000 Cr Sales $9,000 Dr Cost of Goods Sold $5,000 Cr Inventory $5,000	4,000.00
The landed cost should have included a $10,000 freight charge. A voucher for $10,000 is entered. Product profitability for the product is manually adjusted during voucher entry. The profitability entry on the sales order should have only been $3,000.	Dr Freight Expense $10,000 Cr Accounts Payable Trade $10,000	1000 units * -10 = -10,000.00
A cost adjustment is entered to increase the cost of each remaining unit by $10 so that the total unit cost is $60.	Dr Inventory $9,000 Cr Freight Expense $9,000	900 units * 10 = 9,000.00

The freight expense account balance is Dr $1,000.

Net profitability is $3,000.

New sales orders will use the $60 unit cost and impact profitability when invoiced.