Gross Profit Calculation (SAP Business One)

Gross profit calculation refers to the process of determining the gross profit (gross profit) for a sales transaction. It measures the difference between the sales revenue (turnover) and the directly attributable material costs and serves as an indicator of the profitability of individual sales in SAP Business One.

Context and area of application:
In SAP Business One, the gross profit calculation is a central analysis tool that is used in sales documents (quotation, Order, invoice) is used. The function is activated in the system settings and is an integral part of the sales analysis. It allows an economic evaluation to be carried out for each transaction on the basis of defined cost information.

Calculation basis:
The classic formula is:
Gross profit = sales price - material costs (base price)

The display can be shown either as an absolute total or as a percentage. The percentage can be calculated in two ways:

Cost basis: (gross profit / base price) × 100
Sales basis: (gross profit / sales price) × 100

Determination of the base price:
The origin of the material costs (base price) is configured by the system. For Article vouchers the following options are available:

price lists: z.e.g. purchase prices
Item costs: according to valuation methods such as moving average or FIFO
Last purchase price
Last determined price: from inventory valuation simulation
Standard production costs

For Service documents a fixed percentage is used as a basis, possibly supplemented by the costs of the non-stock item.

Display and editing:
The gross profit values are displayed in the sales document and can be edited if you are authorised to do so. Colour markings such as red indicate negative results. However, manual changes to the base price in the order do not affect the central analysis.

Special feature of CRM opportunities:
The expected gross profit can be entered manually in sales opportunities. The system automatically calculates the corresponding amount or percentage value - based on the most recently linked sales documents.

Differentiation from similar terms:
The gross profit differs from the Net result, as it does not take into account any overheads or distribution costs. It is also not linked to the Gross margin which is often used as a percentage figure at company level.

Example:
One item is sold for €150. The material costs are €100 according to the price basis. The gross profit is therefore €50, which is either 50% of the base price or 33,33% of the sales price depending on the method selected.