SALES COSTING

This article provides information about the costing function of sales orders.

TABLE OF CONTENTS

• Overview/Introduction
• Procedure to do costing on Sales Order
• Conclusion

Overview:

Exporting goods to international markets requires careful consideration of various factors, and one of the critical aspects is sales costing.

Sales costing in export shipment involves calculating the expenses associated with selling and delivering goods to customers in foreign markets.

Procedure to do costing on sales order:

• A Sales order contains buyer details, all payment details (including payment type, currency, exchange rate, tax inclusive, Incoterms, unit price), Product quantity, and transport details. 

• The user has to fill up all payment and other details in the sales order screen and all the costing calculations can be seen on the sales costing screen when aligned to its associated Purchase order.
• To run a successful sales costing you should have a SO and a PO with a common Product code.

•     Click on the Costing tab under your selected SO record. (refer to the below screenshot):

• Once the costing tab is selected click on the three dots as shown below >> lookup>> select PO, against the screen field "Purchase order" and select the associated PO from the PO listing.

• After selecting the PO you will find the below screen where the system matches the Buy (purchase) quantity to the Sell (Sales) Quantity. also, if the Buy currency and Sell currencies are different and exchange rates are maintained by the business within the SO and PO then the system will match them as well to calculate the Profit and Loss of each product line.

• Now you can also add extra charges involved in that contract and get an estimated PnL. 

Conclusion:

Sales costing is an estimated Costing as the quantities mentioned are estimated and the exact quantity for that shipment only gets finalized after packing hence the actual Costing is done on the Shipment screen. 

By comprehensively analyzing and understanding the various components involved, businesses can accurately estimate costs, optimize profitability, and make informed decisions.  By carefully considering each aspect of sales costing, exporters can navigate the complex landscape of international trade with confidence.