Unit Price must be more than Unit Cost

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Posted on by Tris15

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Hi Experts

We use FIFO as costing method, and have experience that on some Sales orders we are selling the item for less than the cost i.e. we have a negative margin.

Is there a way to prevent this action since we never use a fixed margin on the sales and is it available on a out of the box BC?

Kind Regards,

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Dynamics 365 Business Central

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Ramesh Kumar 7,527 Super User 2025 Season 2 on at

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No out-of-the-box block against negative margin. But you can control negative toggle on inventory setup page.

https://community.dynamics.com/forums/thread/details/?threadid=c2ef73eb-aac2-4fa6-a16d-6ba85b4c7a5f&

Thanks

Ramesh

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Mansi Soni 8,907 Super User 2025 Season 2 on at

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Hello,

Out of the box, Business Central does not prevent sales below cost there’s no built-in margin check or block. However, you can address this by building a simple extension to validate margins at line level before posting.

Regards,
Mansi Soni

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Jainam M. Kothari 15,631 Super User 2025 Season 2 on at

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Hello,

Business Central does not offer an out-of-the-box feature to prevent selling items below cost when using FIFO, but businesses can manage this by implementing custom margin-check alerts, approval workflows, or using reporting tools like Power BI to monitor negative margins.

While fixed margins aren't enforced, you can guide pricing through item setup and use analysis reports to track profitability.

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Sohail Ahmed 11,136 Super User 2025 Season 2 on at

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This will require custom business logic for that you will need to contact your Microsoft partner

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Jeffrey Bulanadi 8,760 on at

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Hi Tris,

One that surfaces often in FIFO environments where cost fluctuations aren’t always visible at the point of sale.

Out of the box, BC does not block negative margin sales. The system allows you to sell below cost unless you implement custom logic or use indirect controls. However, here are some practical options to help mitigate this:

1. Use the “Unit Price > Unit Cost” Control via Extensions

There’s no native toggle to enforce this, but you can build a simple AL extension that checks the Unit Cost from the item ledger and compares it to the Unit Price on the sales line.

If the price is lower, the system can raise an error or warning before posting.

This logic can be scoped to specific item categories, customer groups, or user roles.

2. Leverage Approval Workflows

Set up a Sales Order Approval Workflow that triggers when margin thresholds are breached.

You can calculate margin using the Sales Line Profit % field and route low-margin orders for review.

3. Use Analysis Views or Power BI Dashboards

Monitor margin trends across items and customers.

Flag items with frequent negative margins and adjust pricing or purchasing strategies accordingly.

4. Educate Sales Teams with Cost Visibility

Add the Last Direct Cost or Average Cost fields to the sales line or item card view.

This gives sales reps real-time visibility into cost and helps them avoid accidental underpricing.

5. Consider Pricing Rules via Price Lists

While BC doesn’t enforce margin-based pricing, you can use Sales Price Worksheets to periodically adjust prices based on cost changes.

Combine this with scheduled reviews to ensure margins are preserved.

Helpful References:
Design Details: Costing Methods – Microsoft Learn
Sales Price and Discount Management – Microsoft Learn
Sales Order Approval Workflow – Dynamics Community
Costing Method Setup Best Practices – Microsoft Learn

If you find this helpful, feel free to mark this as the suggested or verified answer.

Cheers
Jeffrey

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techreviews.digital 376 on at

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To resolve this, the following two solutions can be considered:

Solution 1: Configure an approval workflow on Profit% at the line level so if it declines from the specified percentage, then the specified approver needs to approve the document before posting the same.

Solution 2: Develop a customized extension for creating a log for managing the information of prices and quantity based on the selected costing method in the item card, and then comparing the unit prices with the related unit cost calculated in the customized tracking log, on release and posting of sales documents in Business Central.

I hope this answer will give some insight into resolving your concerns.

Best Regards,
Sheikh Muhammad Jawad

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