Sales and Sales Management Gross Profit Users
For distributors and other companies who sell products with tight margins, gross profit plays a significant role in calculating and approving price discounts for transactions and line items. In these types of businesses, sales teams can use the Gross Profit feature to make informed pricing decisions in the context of gross profit objectives. This capability is particularly useful if sales people can negotiate customer discounts.
For companies that compensate their sales people based on the profitability of sales, gross profit estimates factor into the calculation of commissions. In these businesses, the NetSuite Gross Profit feature can be used in conjunction with the Alternate Selling Amount (ASA) field on sales transactions to effectively calculate sales teams' commissions. For more information, see Commission on Estimated Gross Profit.
Example Sales Gross Profit Scenario
Jim, a sales representative, needs immediate feedback on gross profit potential for each deal he enters, and he structures his deals based on this information. For example, Jim reviews each line of an opportunity to see if the margin on each line meets his gross profit objectives and he also reviews the margin for the entire deal. If he determines that the gross profit margins do not meet his profitability objectives, he can adjust the price discounts or change the product mix.
Mary, Jim's manager, keeps a watchful eye on her team's performance, particularly gross profit margins. Instead of a quota based on sales, her team has a quota based on gross profit. For more information, see ASA Sales Forecasts and Quotas. She creates exception reports to highlight those opportunities or estimates that have low estimated gross profit margins, so that she can discuss them with the sales representatives working on those deals. She plans to implement a scripted process using SuiteScript to warn her and the sales representatives when the gross profit margin on a proposed transaction does not meet her gross profit objectives.
Typical sales team questions may include:
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What does each of the gross profit fields mean? See Using Gross Profit Fields on Transaction Forms .
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Where do gross profit fields display on transaction forms? See Using Gross Profit Fields on Transaction Forms.
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My administrator enabled the Gross Profit feature, but the fields do not appear on the forms? See Frequently Asked Questions about Gross Profit.
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How do I get gross profit data for analysis purposes, if there is no specialized gross profit report? See Including Gross Profit Values in Reports, Searches, and KPIs .