Sales margin plays a crucial role in the corporate world as a compass that directs enterprises towards profitability. It is the discrepancy between a good or service's selling price and its production or acquisition costs. This margin shows a company's capacity to produce income in addition to how well it manages expenses.

1. How to Analyse Profit of
a Sales Order in Odoo 17
Enterprise

2. Introduction
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Sales margin plays a crucial role in the corporate world as a
compass that directs enterprises towards profitability. It is the
discrepancy between a good or service's selling price and its
production or acquisition costs. This margin shows a
company's capacity to produce income in addition to how well
it manages expenses.
Additionally, a key performance indicator (KPI) for evaluating
a company's competitiveness and financial stability is sales
margin. Businesses may spot areas for development, modify
pricing tactics, reorganise processes, and remain ahead of
market swings by tracking and optimising sales margins.

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Defining Sales Margin
● The Sales margin, often dubbed the 'profit margin,’ is the
lifeblood of a thriving enterprise.
● It represents the profit derived from each sale, a critical
metric that can make or break a company’s financial
health.
● Every transaction, whether in goods or services, is closely
linked to this key parameter.
● The sales margin takes into account an array of factors,
from manufacturing costs to product pricing, employee
salaries, and advertising expenses.

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The Crucial Equation
● The equation for calculating the sales margin is
straightforward yet profound.
● It is essentially the difference between the selling price of
a product or service and the total cost associated with it.
● In a dynamic business environment where profit is
paramount, the accurate and timely calculation of this
margin becomes more critical than ever.
● It is a compass that guides businesses toward
prosperous shores and a remedy against losses and
miscalculations.

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The Role of Sales Managers
● In the modern landscape, sales managers play a pivotal
role in shaping the trajectory of a business.
● Armed with the capability to calculate margins, they can
offer customers accurate pricing.
● With a clear grasp of margin data, sales managers can
provide customers with enticing discounts and offers,
driving customer loyalty and satisfaction.

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Activating the Margins Feature
● For businesses that sell a variety of products and services
to customers scattered across different locations,
enabling margin control can be a challenge.
● Transportation expenses, for instance, can greatly
influence the final profit margin.
● Odoo ERP provides a solution that allows you to master
the complexities of profit control, offering an integrated
system for managing sales margins.
● However, before diving into the intricacies, it is essential
to activate the ‘Margins’ feature.
● This can be done in the ‘Settings’ window of the Odoo 17
Sales module.

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Calculating Sales Margins for Orders
● The cornerstone of sales margin management is to focus on the
growth of our business. The sales margin calculation hinges on
meticulous summation.
● Various cost components come into play- from manufacturing
costs to material expenses, including advertising outlays and
much more.
● The actual formula for margin calculation is straightforward - it
is the sales price of a product or service subtracted from the
total cost associated with its production.
● Accurate product pricing is a critical determinant of profit, and
slight deviation can lead to substantial financial losses.

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Practical Implementation in Odoo 17
● In Odoo 17, calculating margins becomes
straightforward.
● By creating a sales order, you can conveniently set the
margin for your products.
● Begin by navigating to the ‘Orders’ menu within the
‘Orders’ tab.

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● The ‘Kanban’ view gives you a holistic view of your sales
orders, displaying essential details like the total price,
customer names, order IDs, and much more separately.

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you can generate a new sales order by clicking the ‘New’ icon.

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● In the ensuing window, choose the customer and specify
the invoice and delivery addresses in the Invoice Address
and Delivery Address field.
● Here, we can select ‘Wood Corner’ as Customer, the
Invoice Address and the Delivery address of the
customer will be automatically allocated.

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● In addition, we can mention the Quotation Template,
Recurring Plan, Pricelist, and Payment Terms in the
respective fields.
● If we want to repeat the sales order on another day, we
can set a recurrence using the Recurring Plan field.
● Based on our requirements, it can be monthly, weekly,
daily, or a custom interval.
● Here, we can choose monthly. We can also set the
Payment Term to ‘Immediate Payment.’

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Select the product for the order from your list of
products

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we choose the product Quantity as one, and then we can click
on the Internal Link situated near to the product name.

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In the Product window, we can see that the Sales Price is set at
$295.00, and the Cost is $287.00

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● The sales margin can be set up by deducting the total
product cost from the sales price.
● Then, sales margin equals Sales price - Cost price (Sales
Margin = Sales price - Cost price).
● In the case of the product, the Acoustic Bloc Screen, the
cost is $287, and the Sales price is $295.
● Therefore, Sales margin =$ 295 - $287 = $ 8.

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● In addition, you can view the Margin rate and the Margin
percentage in the Order Lines itself by activating the ‘Margin’
and ‘Margin (%)’ fields

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The Power of Automatic Margin Calculation
● In Odoo 17, once we have set the margin parameters, the
system will automatically calculate the margin for each
product.
● This seamless process ensures us that we are always
aware of our profit margins and provides real-time
financial insights for strategic decision-making.
● This transparent and dynamic margin calculation can
significantly streamline our business operations.

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