The contribution margin is the difference between revenue and variable costs. It shows the extent to which a product contributes to covering fixed costs and making a profit. In SAP Business One, contribution margin accounting can be broken down by product group in Profitability Analysis, cost accounting and reports.
Detailed explanation/description:
Contribution margin accounting can be mapped in SAP Business One using the integrated cost and profitability analysis functions. The Cost types and cost centers can be customised and structured according to product groups, customers or locations.
Procedure for contribution margin accounting:
- Income statement by product group: Presentation of sales, costs, contribution margins and earnings per product group.
- Cost types and cost centres: Facility for the clear allocation of revenues and costs.
- Calculation and quotation preparation: Support with pricing on the basis of planned costs and calculation of the contribution margin.
- Reports and dashboards: Visualisation of contribution margins for monitoring product, customer or location profitability.
Versino Financial Suite
With the Versino Financial Suite contribution margin accounting in SAP Business One is significantly more powerful: it offers centralised, flexible evaluations, automated data transfer, deep drill-downs and practical export options.
Example of the structure of contribution margin accounting:
| Position | description |
|---|---|
| Proceeds | Revenue from sales |
| Material | Direct material costs |
| Contribution margin 1 | Revenue minus material |
| Variable production costs | Variable production costs |
| Contribution margin 2 | Contribution margin 1 minus variable production costs |
| Fixed production costs | Fixed production costs |
| Other cost centres | Warehouse, purchasing, administration, sales |
| Result | After deduction of all costs |
Important notes on implementation:
- Separation of fixed and variable costs: Basic prerequisite for contribution margin accounting.
- Flexible structure: Customisable to individual requirements such as product groups, customers or locations.
- Cross-module integration: Combination with modules such as production, procurement or quotation management.
Target group:
Controller, sales management, management, project managers, consultants
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