When you have established the prices and discounts to be used for stock items you need to ensure the prices return profit on sales after discounting. This activity can be used to check each stock item to ensure:
Note: This activity checks the selling prices for individual items and uses the average cost price of items. It does not take into consideration any order value discount that can be awarded to customers.
Two reports are generated through this activity: the Price Book Price Check report and the Price Book Invalid Discounts report. If unusual selling prices are found the items and their selling prices are listed in the Price Book Invalid Discounts report.
Open: Price Book > Utilities > Validate Price Book.
Select the validation that you want to perform.
You can either validate that discount amounts for items are not greater than their selling prices, or you can validate that profit margins are above a minimum level and in this case enter the minimum profit percentage (which must be 0.00 or greater).
Note: The type of profit calculation (based on revenue or cost) will be determined by the profit calculation setting in the Stock Control settings.
Specify the items to validate.
You can validate a single stock item, single product group, or all stock items. If you choose single stock item or single product group you must select the item or group to validate.
Note: Product groups displayed for selection do not use mark-up.
If validating prices, for each item not using standard costing the average cost of the item is calculated. For each item where the determined cost is not zero each selling price is checked to ensure that the minimum profit percentage is equalled or exceeded. A report is produced listing items and prices where profit is not achieved.
If validating discounts, for each item that has a discount amount the discount amount(s) is (are) compared to the item selling price(s) which use the same currency as the discount structure. A report is produced listing the items, prices and structures where the discount amount is greater than the price.