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Nit Pick on Margin Terminology - Printable Version

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Nit Pick on Margin Terminology - VortecCPI - 11-29-2017 10:04 PM

I hate to even bring this up but I will...

"GP %" and "Gross Margin" and "Gross Profit Percent"...

Markup = (Price - Cost) / Cost < For reference
Margin = (Price - Cost) / Price < Used in webERP

In my opinion...

The term "GP %" should really be "GM %" because it is a margin calculation (M), not a profit amount (P).

The term "Gross Margin" should really be "Gross Profit" because it is a profit amount, not a margin calculation.

The term "Gross Profit Percent" should really be "Gross Margin Percent" because it is a margin calculation, not a profit amount.

I bring this up only because we just had discussions around Margin versus Markup versus Profit a few days ago. There was a lot of misunderstanding and misuse of the terms by the owners. In our reports I have changed the language file to reflect what is written above.

All that being said the financial reports coming out of webERP look great. Very good work and a big hats-off to all of you who worked on this!


RE: Nit Pick on Terminology - falkoner - 11-29-2017 11:36 PM

I think this is a transatlantic difference. Here in the UK gross margin is used less often, mostly it is referred to as Gross Profit, defined in my copy of Frank Wood as:

a Excess of sales over cost of goods sold or
b Sales less Purchases or
c Cost of goods sold + Opening stock or
d Net profit less expenses of the period.

Probably the place to change this is in the en_US translation file.

Tim


RE: Nit Pick on Terminology - VortecCPI - 11-29-2017 11:53 PM

Thank you Tim. I should likely always preface my comments with my locale so it has better context.

The owners had a big argument over this terminology because it can be confusing.


RE: Nit Pick on Terminology - falkoner - 11-29-2017 11:57 PM

It can be confusing and webERP does sometimes mix UK/USA terms somewhat arbitrarily such as Stock/Inventory Suppliers/Vendors etc. It's one of those not particularly exciting jobs that need doing at some point Smile

Tim


RE: Nit Pick on Terminology - VortecCPI - 11-30-2017 12:00 AM

While I agree there may be a few stragglers in the .PO file you guys have done a great job with USA terms. There were only a few places we still had "Supplier" in lieu of "Vendor".

After over 100 hours of setup, config, and initial testing I am thoroughly impressed with webERP.