Product documentation
In standard Microsoft Dynamics 365 for Finance and Operations it is possible to setup thresholds for a margin check. There is only one set of thresholds which are applicable for all items.
These thresholds are percentages below which the margin will become questionable or unacceptable. But you can imagine that when a company sells products with different cost price values it won't be possible to setup a percentage that fits all products.
E.g. when you sell nails for a price of 1 EURO per 1000, the margin percentage needs to be a lot higher then when you sell expensive machines for a price of 30.000 euro.
On the sales order and quotation lines an icon indicates whether the margin is ok or not. It will not block you from entering an order line with a margin which is below the unacceptable threshold.
The advanced margin alert functionality of has extended the standard functionality with the following additional features:
Note
Retail > Headquarters setup > Parameters > Price and margin management parameters > Margin
| Field | Description |
| General |
| Margin Calculation |
This parameter determines the way the threshold values are interpreted and it will change the labels of the corresponding thresholds Charges percentage = (Sales price -/- Cost price) / Cost price = Standard Microsoft Dynamics 365 for Finance and Operations behavior Gross margin % = (Sales price -/- Cost price) / Sales price Factor = Sales price / Cost price
Example:
|
| Margin for |
Determines the default margin info type (Margin for) on the order lines in the tab price and margin management. The values shown will be based on the selected unit of measure and currency combination. |
| Margin calculation |
Determines the default Margin calculation formula on a Sales markup template, Sales markup and Tier template and determines which components are used and in which order when calculating the sales price. |
| Express margins in |
| Margin for | Select which margin info types (Margin for) will be available as an option to select from in the tab price and margin management. |
Accounts receivable > Setup > Accounts receivable parameters > Margin alerts
| Field | Description |
| Enable margin alert |
With this standard Microsoft Dynamics 365 for Finance and Operations parameter the global margin alert functionality will be enabled for all items. Additionally it activates the Dynamics Price and Margin Management functions:
|
| Acceptable percentage/factor | This field controls the icon  in the order line and is shown if the margin is above this threshold |
| Questionable percentage/factor | This field controls the icon  in the order line and is shown if the margin is between the value of this threshold and the Acceptable threshold |
| Unacceptable percentage/factor | Tbis field controls the icon  in the order line and is shown if the margin is below this threshold |
| Use alternative base for margin calculation |
Standard Microsoft Dynamics 365 for Finance and Operations calculates the margin according to the inventory model of the item. This means it will look for the on-hand cost if stock is present with a fall back to the cost defined on the released product or in case of standard cost to the activated item prices. By enabling this field, the system allows the user to choose a different base for the calculation of the margin. The system will now not use the standard Microsoft Dynamics 365 for Finance and Operations margin calculation anymore, instead it will fetch the corresponding base value directly from the values shown in the price and margin tab of the order line. Prerequisite: For each order line a valid price adjustment needs to be found for which the function cost to sales price calculation has been executed. |
| Base for margin calculation | The values of this parameter can vary based on the selected values in the fields Available cost levels and Available coverage levels in the advanced pricing parameters |
| Use category based margin thresholds |
Uses the category based margin setup if yes, otherwise use the threshold setup from the accounts receivable parameters This parameter is set to Yes by default in order not to break current setup. In older versions of our solution category based margin thresholds were only possible when Use alternative base for margin calculation is enabled. With the introduction of this new parameter this has become optional. |
| Inherit setup options for price margin from parent | When enabled the margin setup is inherited from the parent category hierarchy node. When assigning the category hierarchy type “Margin hierarchy” to a category hierarchy the “Inherit setup options for price margin from parent” checkbox is enabled on all existing nodes and will be enabled for every new sub node that is created. It is possible to override this manually afterwards. |
Product information management > Setup > Categories and attributes > Category hierarchies / Category hierarchy role associations
It is possible to setup margin alert settings per category. To enable these settings on a category, the category hierarchy has to be associated with the Category hierarchy type “Margin hierarchy”.
The tab "Margin alerts will appear on the category hierarchy.
When the "Enable margin alert" checkbox on the category is enabled, the settings from the category are applied. When on the category the "Enable margin alert" field is disabled, no margin check is executed. The system will not fall back to the Margin alert settings in the accounts receivable parameters. Only when the item is not linked to a category of a margin hierarchy the system will fall back.
By using the check box “Inherit setup options for price margin from parent”, it is possible to inherit the settings from the parent category, but they cannot be changed. The default value of this checkbox is determined by the accounts receivable parameter “Inherit setup options for price margin from parent”. It can be overruled by disabling the checkbox.
When the "Inherit setup options for price margin from parent" is enabled on the highest node of the category hierarchy it will inherit the margin alert settings from the accounts receivable parameters.
Retail > Pricing and discounts > Price margin worker groups
Sales and marking > Setup >Prices and discounts > Price margin worker groups
Price margin worker groups are used for two purposes:
| Parameter | Description |
| Override | This parameter is only visible when the Use alternative base for margin calculation parameter in the accounts receivable parameters is enabled. It will enable the Base for margin calculation field. |
|
Base for margin calculation
|
The selected base will be used for calculating the estimated margin values which are presented to the active user. By selecting a different base a manager could give more discount than sales clerk before the margin becomes unacceptable. |
| Show margin values |
Field that are shown in the order line based on the price margin worker group of the active user None: Margin alert (grid) Estimated margin: Margin alert (grid), Estimated margin (grid) Base for margin calculation: Margin alert (grid), Estimated margin (grid) Cost/coverage and margin of selected base for margin calculation fields (Price and margin management tab) All: Margin alert (grid), Estimated margin (grid) Cost/coverage and margin fields of all levels (Price and margin management tab) |
| Show purchase to cost price details |
On the Price and margin management tab the purchase, cost and margin fields are shown. This parameter is enabled when Show margin values is set to Base for margin calculation or All. When user has access to the simulation breakdown the filters to show Cost and Purchase are enabled. |
| Show cost to sales price details |
On the Price and margin management tab the cost, sales and margin fields are shown This parameter is enabled when Show margin values is set to Base for margin calculation or All. When user has access to the simulation breakdown the filters to show Cost, Coverage and Sales are enabled. |
| Allow cost price recalculation | Enables the recalculation button on the order lines, which allows the worker to influence the cost price |
| Hide simulation breakdown |
Users belonging to this group can't see the simulation breakdown. This checkbox is by default enabled and non-editable when the parameters Show purchase to cost price details and Show cost to sales price details are disabled. |
The margin alert check is executed on the sales order and sales quotation. When an order line is saved the system calculates the margin and validates it against the defined thresholds and will show an icon to indicate whether the margin is ok or not.
If you want to use an alternative base for margin calculation, it is important that the cost to sales price calculation has been executed. This will calculate the different cost and coverage values and stores them in the price adjustment.
When an item is added to the order line the cost and coverage values of the applied price adjustment are copied to the order line and used for the calculation of the margin.
The base for margin calculation is taken from the price margin worker group settings of the worker of the active Microsoft Dynamics 365 for Finance and Operations user.
Important
| Question: | What happens if no cost to sales price calculation information is found, e.g. when no price adjustment is found or the applied price adjustment has not been setup correct? |
| Answer: | The system will fall back to the standard financial cost price for validating the margin. Based on the inventory model, the system will find a cost price value in the on-hand inventory, or otherwise the cost price as set upon item chart. |
| Question: | Why don't I see the Price and margin management tab on the order lines or don't see the Cost price calculation tab in the price adjustment or discount form, why are the fields Margin alert and Estimate margin not populated ? |
| Answer: | There is no Price margin worker group linked to the worker of the current user that allows you to see that. |
