How to Generate Item Profit Margin

Overview:

The Item Profit Margin Report in QNE AI Cloud Accounting shows product-level profitability by comparing sales against costs. It calculates gross profit and margin percentages, helping businesses monitor item performance and make smarter decisions on pricing, purchasing, and inventory management.

Scenario:

A trading company wants to analyze which products delivered the best profit margins during the last fiscal year. Management needs insights into both high-performing and underperforming items to guide pricing adjustments, supplier negotiations, and stock optimization.

Solution:

1. Navigate to the report.

• Go to Reporting > Report Center > Stocks > Other Reports > Item Profit Margin.
   

2. In the Report Criteria window:

• Set the As of Date Range to define the reporting cut-off (e.g., end of the current month).

• Then apply the necessary filters to generate the desired report results.
  

3. Click Preview to display the Item Profit Margin Report.
 

4. Review the results:

The report includes:

• Stock (Item Code & Description) – identifies the product.

• Qty – number of units sold.

• U. Price – selling price per unit.

• Sales – total revenue (Qty × Unit Price).

• U. Cost – cost per unit.

• Cost – total cost (Qty × Unit Cost).

• G. Profit – gross profit (Sales – Cost).

• % – gross profit margin (Gross Profit ÷ Sales × 100).
  

Application:

• Pricing Strategy – Identify underpriced items or products sold at a loss.

• Supplier Negotiation – Use margin data to renegotiate with suppliers on high-cost, low-margin items.

• Inventory Planning – Focus stock purchases on consistently profitable items.

• Board Reporting – Provide a clear breakdown of which products drive profitability.

• Audit & Compliance – Support auditors with transparent product-level profitability data.