Paladin’s Invoice Margin Analysis report helps stores identify holes in their margin reporting. The most common issue involves dump sku part numbers (and Kit Trigger items) that have no Avg Cost and no Ref Margin. Remember that inventory items will be considered a dump sku IF Avg Cost is zero. When this happens, the Ref Margin value on that item will be used to record the actual margin made during the sale. If Ref Margin wasn’t changed from its default value of zero, the sale will be recorded as a zero profit/zero margin event. This lowers margin and profit for the department as well as the entire store.
In Paladin, the following warning message displays anytime an inventory item is saved that has zero cost and zero Ref Margin.
Figure 1: Ref Margin warning message
While you are allowed to continue to save the item as is, you may cancel (click No) and enter a reasonable Ref Margin. This will improve your reported margins as well as your Gross Profit Dollars reported at the end of the departmental analysis on the Comparative Revenue report.
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