Profitability Reports

Analyze your revenue, costs, and profit to understand business performance.

Overview

Profitability Reports help you measure how much profit your business is making.

They provide insights into:

• Revenue (sales)
• Cost (purchase / inventory cost)
• Profit (margin)

Why Use Profitability Reports?

These reports help you:

• Identify high-margin products
• Track profitable customers
• Optimize pricing strategies
• Improve business decisions

Key Concepts

Revenue

Total sales value from invoices.

Cost

Cost of goods sold (COGS) based on inventory valuation.

Profit

Profit = Revenue – Cost

Profit Margin

Profit expressed as a percentage.

Formula:

(Profit ÷ Revenue) × 100

Types of Profitability Reports

Item-wise Profitability

Shows profit for each product.

Useful for:

• Identifying best-selling and high-margin items

Customer-wise Profitability

Shows profit generated from each customer.

Useful for:

• Understanding valuable customers
• Managing pricing and discounts

Invoice-wise Profitability

Shows profit per invoice.

Useful for:

• Tracking order-level profitability

Sales Person-wise Profitability

Shows profit generated by each sales rep.

Useful for:

• Performance analysis

How to View Profitability Reports

1. Go to Reports → Sales
2. Select:

• Item-wise Sales
• Customer-wise Sales
• Sales Analytics

3. Apply filters:

• Date range
• Item / Customer
• Sales person

How Profit is Calculated

ERP system calculates profit using:

• Selling Price (from Sales Invoice)
• Buying Cost (from inventory valuation)

Example

Item: Cheese Makhana

| Metric | Value |

|-------|------|

| Selling Price | $100 |

| Cost Price | $70 |

| Profit | $30 |

| Margin | 30% |

Key Metrics to Track

• Total Revenue
• Total Cost
• Gross Profit
• Profit Margin (%)

Best Practices

• Keep item cost updated
• Review reports regularly
• Avoid excessive discounts
• Focus on high-margin products

Common Issues

• Incorrect profit → Check cost price
• Missing data → Verify stock valuation
• Low margin → Review pricing strategy

Why It Matters

Profitability reports help you:

• Increase profits
• Control costs
• Make better business decisions