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Service item profit

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Posted on by David Tailor

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Hello,

i have a case where a customer is selling service items (through SO)
how to track the cost of these items and the important how to see the profit earned?

also: is it possible to see items sold by customer and the see the profit per customer?

Regards,

David

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Deepak Agarwal 9,090 on at

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Hi David,

Item cost is defined on Item master, and regarding profit on item or customer; I dont think there can be a straight answer to this.

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Lisa at AonC.com 1,154 Super User 2026 Season 1 on at

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Please tag the question with the category associated with the Microsoft Dynamics ERP product you are asking about.

Thank you!

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Subra 1,422 on at

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Could you please let me know are you using Service Management module in D365FO?

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André Arnaud de Cal... 305,860 Super User 2026 Season 1 on at

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Hi David,

Please elaborate. How do you define the cost for a service item? What type of services are you selling? Depending on the exact scenario, there are configuration options or not.

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David Tailor 914 on at

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Hi Andre,

This is the scenario:

A company is selling IT services like licenses and other intangible products

On the other hand and after posting the sales invoices and this is frequent, the vendor invoice, the company, the licenses from his side and usually this is happening 2 or 3 weeks later.

The company needs to know the profit earned from these products and if possible per customer.

I hope it is clear now.

Regards,

David

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Joseph Markovich 4,007 on at

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This is an option I've recommended to many people:

Those service items need to be in Inventory as a type of Sales Inventory. Otherwise, the costs don't get tracked through.

This way, you'll have purchase receipts with cost history that can be tied back to sales orders. Then you can see profitability per sales order and per customer.

Let me know if you need any help with this or have other questions.

Joe

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Giorgio Bonacorsi 3,492 on at

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Hello,

To calculate profitability by sales order, you need COGS recorded at the time of the sale.
Profit = Revenue – COGS.

Customer profitability is very simple: just add the Customer ID as a financial dimension on the Sales Order. It will flow to Revenue and COGS postings, allowing easy analysis in accounting. The Customer ID is inherited from the customer master.

About service COGS tracking is a bit more involved:
- Set up your service items as stocked/physical items, but assign them to a virtual warehouse (to avoid affecting real on-hand stock).

- Be disciplined with item master data. Set the virtual warehouse/site as default for services.

For service cost: your choice, either post vendor invoices using the same service items or use standard cost.

Good luck with the implementation!
Giorgio

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David Tailor 914 on at

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So from your answers there is no way to create those items as service items and be able to track cost and see the profitability per item and per customer?

Regards,

Dabid

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André Arnaud de Cal... 305,860 Super User 2026 Season 1 on at

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Hi David,

This is a tricky scenario. To be able to link this via items, you would need to have correct inventory transaction marking or work with serial or batch numbers to get the purchase and sales linked to each other.

Have you considered using e.g. financial tags to link the purchase and sales apart from the inventory costing?

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David Tailor 914 on at

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Hello,

With regard to what you share.

My question was, can I use item of type service to track the cost of the service sold?

And also if I need profitability per customer?

@André Arnaud de Calavon,

The idea of financial tag seems meeting my requirements.

How to use it to reach the above?

Possible with only items of type service?

Regards,

David

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