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Hi, can I found somewhere a documentation about the margin calculation ? Which price is used for (last buying price, cost price, average, ...), how it handle taxes... etc.
Thanks
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The cost price used probably depends on the Model Group set on the Item Model Group of the item. How have you got it set for your items?
Where are you seeing the margin calculated?
in the R3 if you active margin alerts, you have a new column on sales quote/orders. If it depends cost price, what happen when there is no cost price (when product have never been in stock yet) ?
Also it includes taxe amount in the sales price... It must be calculated without taxes. This part is not documented ?
Hi Benoit,
I think it uses the cost price from the inventory module. i.e. if you're using standard cost, it uses the current active standard price. If you're using one of the other costing methods, it uses the cost you can see on the 'On Hand' inquiry 'Cost price' field, which is the running average.
If you have no On hand, it uses the price set on the Released product at Manage costs -> Prices.
If there is no cost price, it seems to use zero as the cost, and therefore margin is 100%. I see in the code the possibility exists for AX to return 'N/A' as the margin, but in some quick tests I could not make it return this value.
I assume the sales price for the calculation is from the sales line, with all applicable discounts. But I would not expect Sales Tax to form part of the calculation.
An update to this. I saw that Margin alert wasn't using the running average cost price (for items which were actual costed). It was always falling back to the cost price on the released product.
MS support told me this is fixed with hotfix KB 3040206 'Wrong line margin calculation in a sales order' and after a quick test I agree with them.
Hi - am also struggeling with getting margins right. for once - what cost-price is used, and how do i get AX 2012 R3 to compensate for my broaker agreements BEFORE calculating margins (setting the margin-alert)? Any suggestions?
Hi Sumborg,
Do you know what CU you have installed?
Hi there.
Did a full manual run on margin-calculation, and found that it's something in my broaker-agreement setup that is messing up some of the orders. In general AX 2012 R3 actually does take product-sales price and deducts all discounts - AND eventual commissions, and from that number subtracts the product-cost as listed on the product under manage cost, and then divides this margin with the net sales price minus commissions. Found that most of my commissioned orders matced this, and the margin calculated by AX. I assume that if AX can do it on product-lines it can do it on a full order; So I'm back to a bug-hunt in my own setup :o)
[quote user="Sumborg"]
subtracts the product-cost as listed on the product under manage cost
[/quote]
That, I think, could be a bug. AX is allowed to use the cost on the item record, but only if it is unable to find a cost by 'normal' means. For an actual costed item, AX should actually be using the current running average cost price. Further up, you'll see mention of a hotfix that addresses this. The hotfix is included in R3 CU9.
Ah - but we manufacture to order, and thus have no costed items. We update item cost on a regular basis, and calculate real cost on all production orders - and compare this to our current item cost. I've checked a few orders, and AX actually in our setup uses the item cost for margin-calculations. Guess we are not running an average user setup, but I think our cost-prices are quite accurate as is; so no need to rock that boat :o) We run the AX 2012 R3 RTM version.
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