How to identify and manage cost changes in Invoices

This article explains how to track and act on cost changes through the Invoices workflow.

Introduction

Regularly reviewing invoices helps protect profit margins by allowing retailers to respond quickly to any cost changes. 

Reasons for cost changes

A cost change signifies one of the following changes to a product's cost:

1. Cost Change - The vendor cost has been permanently increased or decreased.
2. Vendor Promotion - The vendor cost has potentially been decreased due to a vendor promotion.
3. First Time Cost - The vendor cost for the associated product is being entered for the first time.

Terminology

Below are explanations of the different sections of the Cost Changes portion of the Invoice tool.

1. Cost Change Tracker - At the top left of the Cost Changes section, a tracker shows how many of the cost changes have been addressed.
2. Name - The description of the product as read from the invoice.
   1. This description may differ from the product's description in Back Office.
3. Cost Change - The new vendor cost of the item detected from the invoice as well as the active cost of that item.
4. Margin - This field shows the current margin for the product, calculated using the active retail price and cost. If the price remains the same despite cost changes, margin adjustments will be highlighted in red for decreases or green for increases, allowing for quick assessment of profitability.
5. Old Price - The active standard retail price of the product.
   
6. New Price - The new suggested retail price of the product. This suggestion is based on maintaining the target margin of the product if one has been set. If a target margin has not been set for the product, a margin of 35% will be auto-suggested in the new price.

Addressing Cost Changes

Potential Actions

When a cost change is detected, one of two actions may be taken:

1. Save - Save the detected vendor cost to the associated product. The retail price of the product may be increased, decreased, or left the same.
2. Skip - Do not save the the detected with the associated product. The retail price will not change.
   
   1. If a vendor cost has previously been saved with the associated product, that cost will remain the active cost.

Changing & saving the retail price

Regardless of the degree of a cost change, the New Price of every cost change is filled with an automatically suggested price. As explained earlier, this new suggested price is generate based on the target margin of the product (or a default 35% margin if there is none). 

• To save the automatically suggested price of the product, click Save on the product's row.
  
  

To manually adjust the New Price, there are two options:

1. Margin Dropdown Menu - After clicking the New Price, a dropdown menu will offer prices based on several default margin targets. Select an option then click Save on the product's row to activate the new price.
2. Manual Entry - After clicking the New Price, manually enter a new price then click Save on the product's row to activate the new price.

Advanced Product Editing

• Click the icon next to the name of each product to open to the Product details page for advanced product editing.

• Click the icon within the Cost Change section to manually edit the invoice cost, UOM, and case size of an item.
• All other invoice item traits of an item may be manually edited on the Items table at the bottom of the invoice's page. Updates made to this table will save across all other sections of the invoice.