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This product can help:

"We supply our products to several customers but one of them accounts for half of our sales volume. This client wishes to increase their purchasing volume but at a lower price and different terms. Should we agree?"

Calculating the Total cost of Products

Description of the Service

Customer description: Your company needs to regularly prepare price offers for your customers. It is very important to determine the price of your products / services correctly in order to be competitive and to be profitable.

Customer requirements: We prefer to work with firms that have an ordered system of bookkeeping and computerized warehouse internal accounting system. If there is an electronic system in place but it is not working as well as you wish, we can, as part of our service, provide recommendations on methods for more efficient internal accounting organization.

 

Description of the service:
Your enterprise must regularly review your prices. Price offers are prepared regularly for each client, or your company carries a pricing survey. Or, from time to time, a revision of prices is made. In each case it is essential to the health of your business to correctly calculate the prices of goods and services.

Calculations developed by us help enterprises not only to correctly determine prices but also, on a monthly basis, monitor changes and, if necessary, initiate a correction in prices.
 

The Functionality of the Model:


• Separation of direct production / sales costs by products (the cost of raw materials, salaries, production personnel, and others);
• Separation of indirect costs by product, in accordance with the principles defined by you, (for example, assigning the uniform mark-up coefficient to variable costs);
• Ability to adjust the separation of fixed costs, depending on the product group. It is very important in certain groups of products where the company faces strong competition and is forced to offer the lowest possible price. In this case, fixed costs may be offset by other product groups;

• Based on calculations made in the preceding paragraphs - calculation of minimum required prices;
• Ability to calculate how the selling price of each product will change when the production / sales volumes change (the calculation of economies of scale);
• Ability to calculate how the  price of each product will change when raw material prices or wage levels change (the calculation of the effects of inflation);
• Ability to compare the minimum required price with current prices, identify problem products and sales channels;
• Automatic data input - data for this service will be automatically exported from the accounting records of the system into the profitability model.