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Level 1

Item cost quantity Discounts

When I sell items, I want to use the quantity discuunt pricing however, when I purchase items form my supplier in quantities I also get a discount on my costs.

 

Now, when I try to set up my pricing dicsount schedule, I can only have the one default "cost" when in reality by cost also changes when I purchase.  So it is very difficult for me to use this feature.  There is a column on the discount table which shows costs, but I can not edit that.   If I could edit my cost based on the qty, then I could use this feature to generate the qty discount selling prices with the correct margins.    Any Ideas on how to do this?

8 Comments
Moderator

Re: Item cost quantity Discounts

Glad to see you here, rwkarr.

 

You may want to consider using the Price Rules feature. Since there are changes in your purchase, using this feature helps you set conditions as to what items you what the discounted price to reflect.

 

I've added this guide about the said feature: Use Advanced Pricing.

 

However, if you don't want to use the Price Rule feature, you'll have to manually update the Cost and Sales Price of an item. Just a heads up, doing this will affect your Cost of Goods Sold and your Average Cost. With that said, I'd suggest reaching out to your accountant to help you decide.

 

Here's how to update the Sales Price:

  1. From the Lists menu, select Item List.
  2. Select the item.
  3. Enter the new Cost and Sales Price.
  4. Click OK.

You can check this reference for more information in updating your item list: Add, edit, and delete items.

 

I'm always around if you still need my help. Thank you and take care!

Level 1

Re: Item cost quantity Discounts

Please note that, since we buy and resell, our costs vary based on qty also.     

If you take a look at the screen shot I captured, you can see that there is a column for cost but it is not editable.   

 

Since cost really is just a reference amount in the item creation/description (actual costs comes from actual amount paid on receipt of the product) why not allow the user to vary the item's cost based on qty also.    

 

If you say I can have a price rule, I am not sure how that would work.   I need my sales people to be able to put in the product number and have the description come up in the estimate screen.  Then when they put in the qty, the price would be correct.  Let's say I want to have a 40% margin on my sales as my target margin.   to do this, I need to have the right cost.   This doesn't seem like it would be difficult to do or have any real affect on the actual purchase transaction or the actual real inventory vale since cost entered when the item is created is not necessarily what the purchase price will really be.     Do you follow my train of thought here?

Level 1

Re: Item cost quantity Discounts

We buy and resell items which have different costs based on the quantity we purchase.   We also sell with qty discounts.   I just want the ability to put in the variable cost with the qty just like I put in the variable selling price with the qty on the qty discount table.  The column is there but the cost is not editable.   

 

Since item cost is really a reference and not necessarily what the purchase price will be, it won't affect my COGS any different than if I do it manually.   Having it automatically done will allow my sales people to do estimates with proper target profit margins without them having to know the variable costing based on the qty we purchase.        If this can be done via a price rule, please explain more detail.  This is really related to me being able to define qty discount on the items I purchase and then also apply it to my qty discount schedule/table in my selling price.    To me it makes perfect sense.  If I can sell with qty discounts, why wouldn't I be able to also buy items with qty discounts????   See attached where column for cost exists but cannot be edited.  

Level 1

Re: Item cost quantity Discounts

I don't think get it.   Imagine just like ind advanced pricing.   Prices changes are applied at quanity steps/level.     Think of the me as the customer who is buying the item which has different costs depending on the qty.   QB now lets me have variable selling prices on an item.  But not variable purchasing prices on an item.  It seems logical that if they understand that people sell with variable prices on items based on qty... people must buy items at variable costs based on qty.  Yet, QB will not allow me to have variable costs on an item based on qty defined.   Seems that only got half of the function right.  

Moderator

Re: Item cost quantity Discounts

Hi rwkarr,

 

Thanks for letting me know your insights about the quantity discount for the item cost.

 

I'm going to forward this feedback to our product engineers so they can take a look at this. This feature might be included in the next product update.

 

Just leave me a message below if you have additional questions or suggestions with QuickBooks.

Level 15

Re: Item cost quantity Discounts


@rwkarr wrote:

I don't think get it.   Imagine just like ind advanced pricing.   Prices changes are applied at quanity steps/level.     Think of the me as the customer who is buying the item which has different costs depending on the qty.   QB now lets me have variable selling prices on an item.  But not variable purchasing prices on an item.  It seems logical that if they understand that people sell with variable prices on items based on qty... people must buy items at variable costs based on qty.  Yet, QB will not allow me to have variable costs on an item based on qty defined.   Seems that only got half of the function right.  


 

Purchasing - you buy the item stating qty and the total cost you pay, discounts are not posted separately.  In QBO that sets a purchase date cost for the item, QBO used FIFO inventory only.  When you sell the cost of the oldest purchase is used to post to COGS for the sale, no option.

 

Selling - you can set a mark up, but that mark up has to be based on an average cost, the inventory valuation summary report shows that average cost. 

Level 1

Re: Item cost quantity Discounts

Thanks for you help.    I completely understand real costs and average costing.  However, when add and item and define it, I put in its cost, right????    But that cost is not necessarily the actual cost I will pay.   Yet, in the same function of defining my item, I can put in variable qty table of selling costs.    So, I need to be able to get a 40% as my targe  (this is just an example) on all items at all quantities.    If I purchase qty 1 of an item, I pay US$2.00 for it.  If I purchase 100 of an item, I pay Us$1.25 for the same item.   Why can't I put in a table of qty/costs just like I do on qty / price?   

 

Cost/inventory value does not happen until I actually purchase. Meanwhile, estimates, sales, purchasing happens all prior to actual sales.   If is quite clear that this function is only halfway thought out at present.    Please don't patronize me on telling be about average costng of actual inventory.    I don't know how that works if/when I receive any items into inventory.    This is more about creating items, putting in the estimated costs.  (imagine my supplier uses QB and sends me a quote/ estimate with variable quantity pricing (my costs).  So, what costs do I put in?   I want to make 40% margin regardless of the costs and the individual project.   So, using average on a project/qty by project/qty basis makes a lot of math work to really figure out what price to charge my end user unless I just use a separate excel spreadsheet.    I can do this easily.  Just seems QB could also do it easily when an item is being defined just like they do variable pricing when the item is designed based on qty in the advance pricing function.  Maybe accountants to get it because they don't deal in the real world of sales, purchasing and pricing.   Please put your self int he shoes of a real entrepreneur trying to avoid using separate spread sheets to come up with estimate pricing at target margins when costs vary to me based on the qty I purchase.  

Anonymous
Not applicable

Re: Item cost quantity Discounts

Thank you for getting back, @rwkarr.

 

I can help provide additional information about your inventory cost.

 

Yes, you're right about the cost value. This will only be affected once a purchase transaction is entered.

 

In the inventory item setup, the cost entered will not affect average costing since this will only update the automation when you enter the item for vendors. 

 

You can also refer to this article on how QuickBooks handles COGS: Understand Inventory Assets and COGS tracking.

 

Let me know if you have additional questions about your cost/inventory value. I'm here to help however I can. 

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