Automatic pricing: setting up markups, currency rates, and common user mistakes

Based on the provided sources, including the user guide and the history of support requests, here is a detailed explanation of the automatic price calculation mechanism in Torgsoft and the typical mistakes that occur during its use.

How automatic markup-based price calculation works

In Torgsoft, pricing is based on adding markup to the base cost of a product, either the purchase price or its equivalent in foreign currency. This process can take place both when goods are received and in bulk for products that already exist in the system.

1. Price formation when goods are received

When goods are received into stock, the price is formed automatically if a markup percentage has been specified for the product or its product type.

• Calculation logic. The program takes the purchase price, adds VAT to it if the relevant setting is enabled in the goods receipt note parameters, adds additional expenses from the goods receipt note if they are included in the cost, and applies the markup percentage to the resulting amount.

• Settings in «Product type». For automation, you can set a markup for an entire product group in the product type card to which the product belongs. When a new product of this type is received, the markup is applied automatically.

• Markup groups. You can configure a «Markup group» by checking the "Markup from product price" field in the product type card, where the markup percentage changes depending on the purchase price range, for example 50% for low-cost goods and 20% for expensive goods.

2. Bulk repricing through the «Calculation of retail and wholesale prices by markup and exchange rate» form

This tool is located in the menu Warehouse — Calculation of retail and wholesale prices by markup and exchange rate. It allows you to change product prices dynamically, especially for imported goods, depending on exchange rates or changes in purchasing policy.

Tool algorithm:

1. Product selection. You can filter products by product type, manufacturer, supplier, season, color, material, gender, name, SKU, or other additional product characteristics.

2. Calculation method:

•    From purchase price. The price is recalculated based on the latest purchase in national currency or purchase currency.

•    From equivalent price. Used if a price in foreign currency, for example in dollars, is specified in the product card and needs to be recalculated into hryvnias at the current exchange rate.

3. Exchange rate selection. You can use the «Today only» or «Nearest» rate, which is the most recently entered rate even if it was added a long time ago.

4. Method of change:

•    Instant. Prices are changed immediately in the product cards.

•    Repricing act. A document is created that can be reviewed, new price tags can be printed, and it can be applied later in the "Document" - "Repricing acts" form.

Where users make mistakes most often

An analysis of support requests and documentation reveals the following common mistakes when working with markups and price calculation:

1. Using markup % and markup amount at the same time

The product card contains the fields «Markup (%)» and «Markup (UAH)». Filling in both fields at the same time is a mistake.

• Consequence. The program will first add the markup in hryvnias to the purchase price and then apply the percentage markup to the resulting amount. This leads to an inflated price. It is recommended to use only one type of markup.

2. VAT mistakes (Tax on tax)

Users often get confused with VAT settings when goods are received.

• Situation. If the prices in the supplier’s invoice already include VAT, and the goods receipt note has the «Add VAT to purchase price» checkbox enabled, tax will be charged twice.

• Rule. Selling price = (Purchase price + VAT) + Markup. It is important to make sure VAT is not charged twice if it is already included in the supplier’s incoming price.

3. Incorrect application of a Repricing Act to Accounting Centers

When using the bulk price calculation tool, it is important to apply the created Repricing Act correctly.

• Mistake. A Repricing Act created from a price calculation for one store, that is an Accounting Center, is applied to another one, or price synchronization settings are not taken into account.

• Solution. When applying the act, it is necessary to select the same Accounting Center that was specified during calculation, or make sure the «Maintain the same prices across all retail outlets» setting is enabled.

4. Ignoring the quantity link, wholesale prices

When configuring wholesale prices, users often set a price but do not configure the conditions for switching from the retail price to the wholesale price depending on the product quantity.

• Mistake. The configured wholesale price does not trigger automatically during a sale.

• Reason. The «Switch from retail price to wholesale depending on quantity» parameter is not configured, for example, using one switch threshold or using a wholesale pricing policy. Or there is a restriction against such a switch in the settings of the specific Accounting Center.

5. Product import and price overwriting

When importing invoices from Excel, price mistakes often occur if the import parameters are configured incorrectly.

• Mistake. Importing a product with a «zero» price or incorrect configuration of the markup formation method during import.

• Nuance. If the «By import markup» markup formation method is selected and it is not specified in the file, the price may be formed incorrectly. Also, if you import a product with a price of 0 to update other fields, this may lead to the selling price being reset to zero.

6. Price rounding

Incorrect rounding settings can lead to profit loss or strange prices, for example 99.99 UAH when you want to have round figures.

• Consequence. If the «Product type» has price rounding set to a whole number, and you try to set a price with kopecks through bulk repricing without taking this setting into account, the program will still round the price and ignore your manual adjustments in the calculation.

Recommendations for avoiding mistakes

1. Check the «Product type». Make sure that markups and rounding rules are configured correctly in the product type tree before starting bulk receipt of goods.

2. Use «Stock analysis». To change the purchase price, it is better to use the «Stock analysis» mode instead of changing the purchase price in a previously created goods receipt note, especially if goods from that supply batch have already been sold.

3. Test on one product. Before applying the «Calculation of retail and wholesale prices» in bulk, check the result on one test product to make sure the repricing is performed correctly, meaning the right price rounding is selected, the correct exchange rate is used, the correct markup is set, and so on.