Markup Systems

Use Markup Systems to calculate the cost of items that you resell or use in projects.

HINT-- Markup Systems are a quick way to calculate markup for sales and project billing in the Goldenseal accounting software.

WEBSITE INFO LINKS
Accounting Software | Point of Sale Software | Unit Cost Software

RELATED TOPICS
Assemblies | Cost Items | Item Discounts | Price Rounding | Unit Cost setup

Entering Markup Systems

To enter a Markup System, follow these steps:

Choose Income Setup from the Income menu, then choose Markup Systems from the submenu.
Click the New button, or click on an existing item and click the Edit button.
Enter details for the system.

Data Fields

Enter the following information for each markup system:

Name-- Type in a brief name for this markup system. This is the text that will appear in clairvoyant fields.
Description-- Type in any comments you'd like to make about this item.
Resale-- Enter calculation and rounding methods for items that you sell in a Sale transaction.
Reduced-- Enter calculation and rounding methods for items that you sell in a Sale transaction when the On Sale checkbox is turned on.
Project-- Enter calculation and rounding methods for Cost Items included directly in a project Estimate. This price is also used for Time and Materials billing if the Project Payment Terms are set to include markup.
Component-- Enter calculation and rounding methods for items that are included as components in an Assembly. When it calculates the price of an Assembly, Goldenseal applies the component markup to each component, adds the components together, and then applies the Assembly's markup.
Inventory-- Enter calculation and rounding methods for the inventory value of Cost Items or Assemblies.
Overhead Account-- Enter the Overhead account where profits from this markup will be credited.

Markup Prices

Goldenseal markups calculate five different prices for each unit cost:

Resale-- The price when you sell an item directly to a customer.
Reduced-- The price when you sell an item directly when it is "on sale".
Project-- The price when you use an item in a project.
Component-- The price when you include an item in an Assembly.
Inventory-- The value of an item while it is stored in inventory.

Markup Calculations

For each of the five markup prices, enter the following information:

Amount-- Enter the percentage markup that will be used for this markup price (or if you use a fixed addition, enter the amount to add).
Calculation-- Use the pop-up menu to select a calculation choice.
Rounding-- Choose the Rounding Method to use for this price. You can round numbers to an even quantity, or trim them to "retail" pricing such as $9.95.

Calculation Choices

Enter one of the following choices in the Calculation field for each markup price:

Retail markup-- based on a percentage of the final sale price (sometimes called Margin). It is calculated by the following formula: Sale Price = Purchase Price * (1/(1- Markup Percentage)). If you purchase an item for $10.00 and use a 40% retail markup, the sale price will be 1 * (1/(1-.4)), or $16.67.
HINT-- The $6.67 markup amount is 40% of the $16.67 selling price.
Simple markup-- based on a percentage of the purchase price. It is calculated by the following formula: Sale Price = Purchase Price * (1+ Markup Percentage). If you purchase an item for $10.00 and use a 40% simple markup, the sale price will be 1 * (1+.4), or $14.00.
HINT-- The $4.00 markup amount is 40% of the $10.00 purchase price.
Fixed addition-- Goldenseal will add the entered dollar amount to the purchase price.
Manual Pricing-- Goldenseal will not calculate a price. Instead the price field will be editable, and you can type in any price.
No Markup-- Goldenseal will not add any markup. The sale price will be the same as the purchase price.
Not Available-- The markup method will not apply at all to that type of markup price.

Using Markup Systems

To use a Markup System, enter it into the Markup field in a Cost Item or Assembly. The Markup System will then calculate resale, reduced price, project, component and inventory prices for the item.