Distributors may choose to provide costs loaded with overhead factors –typically 3-7% on some or all products that they sell. Inform accommodates these "loads" by allowing you to create formulas under the Price Rollup Schedule.
If you want to use loaded costs; first review how Cost and Price cost columns are managed in the Company Master, then create the formulas under the Price Rollup Schedule, and lastly you can update pricing for existing products.
- Configure defaults in the Company Master
Review the user-defined Price and Cost fields in the Company Master on the Pricing/Costing tab. Click on the link below for the settings and information to examine before creating Price Rollup Formulas.
Warning: Before making any changes please consult DDI Support.
Designate one column to equal the Loaded Cost (usually the C4 field). You can then use the other columns to fill other pricing needs such as using the list cost for customer prices.
Company Master options to review
File>Company>Master>Pricing/Costing Description Sales Order GP% Cost Column
(C1 to C7)This is the cost column that appears in the sales order to calculate the gross profit. If you use margin price then the system will use this cost to calculate the price based on the desired margin. (See Understand sales history-based pricing for more information).
This cost is also used through several of the reporting functions of the system such as KPI’s, Executive Performance Summary, and Who Bought What Report.
Salesman Commission Cost Column
(C1 to C7)Select the Cost Column that will be used to calculate the commission for each of your salesmen. You can choose to calculate commission from the Loaded Cost or from another cost column. For more information see About sales commission matrices.
If you do not want the loaded cost to be visible to your sales staff, you can use the Access Levels and User Master screens to require a higher access level to view these figures and formulas
User Defined Label for Cost Column C4/C6/C7
Under the Pricing/Costing tab in your Company Master, you can label the Cost and Price Columns to indicate what type of cost or price the column holds. For example C4 can be defined as the Salesman Cost. The label entered here will appear in the Product Master in the cost/price column.
- Create formulas for loaded costs
The Price Rollup Schedule allows you to account for loaded costs by adding an overhead percentage to the cost of the product. Each time the base cost of the product changes, this percentage will be recalculated and added to the base cost automatically, keeping the loaded costs for all products in the Price Group or Product Line up to date, without requiring you to look at each individual product.
A typical pricing structure will set the C4 field equal to the cost of the product. This field is calculated from C1 (replacement cost), using a stable cost and not one that fluctuates like C2 (average cost) and C3 (landed cost).. Using the Price Rollup Schedule, you can customize your own formulas for calculating the Loaded Cost for different Price Groups, Product Lines, Vendors or on the product level. Stay ahead of cost increases by also setting Future Price Rollup formulas that will automatically take effect on a selected date.
Review the following article to learn more about how to Set a price roll-up schedule
Note: Once you have added a rollup to the cost/price column then you cannot manually update that cost/price column. Once a formula is set, it will be used to calculate the Loaded Cost for all of the products in the group until you choose to change it.
- Update prices
Once you have set your formulas, the Loaded Cost field will automatically recalculate when the base cost field is updated via direct input to the Product Master, Mass Change, or Product Import.
When the distributors send you new cost prices, you will need to enter these into the system so that the formulas you set earlier in the Price Rollup Schedule can calculate an accurate cost and price for the product.
See four ways to update costs for existing products
- Enter new costs directly into the Product Master for each product. This method is best if you only have a few products to update. See Add main product and price information.
- Use the Price Change screen to compile a list of products and update a single cost field from one screen. This method is best if you have a select group –Product Line, Price Group, etc.–of products to update. To learn how to use this update option, see Manually change a product price.
- Perform a Product Import using an excel spreadsheet that your vendor provided. This method is best if you have a large number of products to update. See Import product information from a spreadsheet.
- If a vendor gives you an overall percent that the cost is increasing, you can easily update your costs through the Change Price by Formula screen. See Change a price by formula.
Once the base costs/prices are updated (immediately or on a future date) then the loaded cost/prices you created with the Price Rollup Schedule will also update.