Entrepreneurs often face a situation where, when summarizing monthly results, the profit figures in the "Analysis - Period" and "Product/Trade Reports" forms do not match. "Period Analysis" is a strategic management tool for a comprehensive assessment of the company’s financial condition for an accounting month, while product reports show the operational picture of sales for specific dates.
Entrepreneurs usually ask: "Why does the profit not match?", "Where did the money go?" or "Why do the reports show different data after a product return?". Most often, this situation occurs at the end of the month when product returns, inventory counts or active sales "into negative stock" took place.
To understand why these discrepancies occur, it is necessary to examine the logic of how Torgsoft works in detail, because these two modes perform different tasks and calculate financial indicators using different mathematical models.
1. Different profit calculation algorithms
The main reason for discrepancies lies in the formulas used by the reports to calculate the entrepreneur’s final profit.
In the Product or Trade Report, profit is calculated using a simplified, purely operational formula: revenue minus the cost of revenue. That is, the program takes the sales amount, subtracts the cost of these sales, then subtracts the amount of returns and adds back the cost of the returned goods.
In the "Analysis - Period" mode, profit calculation is much deeper and includes additional components that affect the overall financial result of the business. In addition to standard sales and returns, the "Period Analysis" formula automatically takes into account:
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Write-off of goods, for example spoilage or defects.
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Shortages from inventory counts.
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Payments with bonuses and refunds of bonus payments.
Conclusion: comparing the "Product Report" and "Period Analysis" by the "Profit" column is incorrect. They can only be compared in terms of sales and return amounts, because the product report does not know how much stock you wrote off in the warehouse or how many shortages were found during inventory recounting.
2. Document date versus accounting period
This is the second most common reason why reports differ specifically after customer returns.
The Product Report for a period is always built strictly by the DATE the document was created. If you select a report from April 1 to April 30, it will include all operations physically performed on those days.
Instead, "Analysis - Period" is built by the document’s ACCOUNTING PERIOD. In Torgsoft, each document, whether a sale or a return, has both a physical date and a link to a financial period, namely a month, and these two parameters may differ. For example, a customer bought an item in March and returned it on April 14. When processing the return, the seller or owner could change the accounting period of this document to "March" in order to adjust sellers’ salaries or the financial results of the previous month. As a result:
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In the Product Report for April, this return will be shown because the document date is in April.
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In "Period Analysis" for April, this return will not be shown because it is assigned to the March period.
3. Sales "into negative stock" with no cost recorded
If Torgsoft settings allow selling goods "into negative stock", meaning shipping goods that are not yet formally available in stock or have not been properly received, this will inevitably distort the reports.
When you sell goods "into negative stock", the program cannot record their cost at the time of sale because the goods are not in stock and the system does not know which supply batch should be used to take the cost price.
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The product or operational report for the day will show the sales amount, but will not take the cost into account, which will artificially overstate profit at that moment.
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"Period Analysis" after the "Recalculate cost" action will pull the last known cost from warehouse stock or update the data after you finally receive the goods into stock.
Solution: if you actively sell "into negative stock", the reports will never match down to the last cent until stock balances are fully aligned with incoming invoices and cost is recalculated. Torgsoft support specialists strongly recommend prohibiting sales "into negative stock" to preserve the reliability of turnover statements.
4. The effect of gift certificates and bonuses
Unlike simple product reports, the "Period Analysis" mode takes into account the global balance of gift certificates. If you sold a gift certificate for UAH 50 and its face value is UAH 100, then when calculating profit in "Period Analysis", the program will include these losses in the overall result of the company. The Product Report will not show such deeper financial nuances. In addition, payments with bonuses may not appear in regular product or cash reports, but they always affect "Period Analysis".
How to analyze discrepancies correctly: tips for entrepreneurs
If you see discrepancies between these reports, follow these steps:
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Do not compare the "Profit" or "Cost" columns. Compare only the "Sales Amount" and "Return Amount" columns.
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Check return dates and periods. Make sure that all returns made in the current month belong to the accounting period of the same month.
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Recalculate the cost. Always click the "Recalculate cost" button before summarizing financial results in "Period Analysis". This will update the data for all documents where goods movement occurred.
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Control write-offs and inventory counts. Remember that any written-off goods or shortage found during inventory recounting will automatically reduce your profit in "Period Analysis", while in the Product Report this profit may appear higher.
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