Gross Profit

Porridge

My woocommerce installation has the taxes included in the sales price.
When calculating Gross Profit in ATUM, it appears that the profit margin includes the taxes in the sales price, creating an inaccurately high profit margin. Is there a way to have the gross profit calculated excluding the tax?

Salva

Hi Porridge

I've just checked it and when the product prices are set up as "including taxes", ATUM is subtracting them before doing the gross profit calculation. However, I've noted that we are always using the regular price for the calculation and not the sale price. I guess this is causing inaccurate values for you. Am I right?

Anyway, we are going to fix this for the next ATUM version.

Best Regards,
Salva.

Porridge

Hi. Thanks for the response. I was referring to the regular price of the product - sorry for the confusion
The regular price of the product is 125
Taxes are included in the price and are 25%. That means the product returns 100 after tax.
The purchase price is 59
ATUM is calculating the gross profit as 53%
(125-59)/125=53%

The correct answer should be
(100-59)/100=41%

Porridge

AndreaRebel

Hi Porridge

Thanks for the explanation. It will be fixed in the next version release.

Best Regards,

Andrea.

Porridge

Perhaps to add to the confusion - it seems that when I have selected in Woocommerce to include tax in the product price displayed on the website, ATUM is also assuming the tax is added to the purchase price. I haven't included taxes in my purchase price and assume that most people in Europe wouldn't. When discussing wholesale / business pricing, it is always excluding taxes. When discussing retail pricing, taxes are always included.

I believe ATUM is actually calculating gross profit as such in that case
ATUM is calculating the gross profit as 53%
(100-47.2)/100=53%

To be clear
My purchase price is 59 (excluding tax - I have 59 recorded in atum)
My sales price is 125 (including tax - this is also what is recorded in atum)
The expected profit is : 100(cost of goods without tax)-59(purchase price)/100=41%

Salva

Hi Porridge

I see you finally figured out the problem.
That's correct and it's the way ATUM actually works (at least the free version). If you set the WC tax option to "prices including taxes", this affects all the site prices (sale price, regular price and also purchase price).
You can see this when you create a new PO. If you add a new product and have the "prices including taxes", ATUM should deduct the shop taxes from the purchase price and add a "tax" column with the taxes apart. This is because Purchase Orders free can only work with the taxes configured in WooCommerce settings and cannot handle different taxes. FYI, multiple taxes configurations (and many more features) will be part of the upcoming Purchase Orders PRO add-on (that we plan to release this month).

Best Regards,
Salva.

artur

Porridge had very good point. very sad that you didnt fix this problem just by adding one check box for webshop owners who live in countries and sell for retail customer in countries which has VAT system .

as company you buy products WITHOUT VAT. so you write purchase price without VAT.
as company we obligated to write prices for final customers incl vat. So normal shop owner write product prices incl VAT.
some countries have different vat for differnt products which woocommerce support very well.

Why couldnt you implement as custom choice that would be taken sales price - product vat = price without vat - purchase price = profit

japiera

Hi artur ,

Apologies for any inconvenience caused.

As my colleague @Salva explained two years ago, this was already implemented in the Purchase Orders Pro premium addon. It allows you to set the tax rate per order, and the default tax rate for any Supplier.

Best Regards,
José Andrés