Settlement Calculator
Overview
Silo's Settlement Calculator automatically calculates the cost per unit for items on a purchase order based on target commission (or profit percent) of revenue less expenses.
How does the calculator work?
There are two ways to use the settlement calculator: target profit % or cost/unit.
Target Profit % Method
- As a user, you determine the target profit % you want to make for each lot on a purchase order and Silo will automatically calculate the cost per unit and other high-level metrics such as the profit of the entire order and balance due.
- For an individual lot, Cost per unit = [Revenue - Expenses - Target Profit $] / [Total Units]
- Revenue = [price per unit sold x units sold] - [credit per unit x number of units credited] + revenue share of downstream lots (e.g., repacked and transferred lots)
- Expenses = All PO, SO, lot, and transfer expenses tied to the purchase lot (what is on the PO) and downstream lots (repack and transfer lots)
- Target Profit $ = [Revenue] x [Target Profit %]
Cost/Unit Method
- You can specify a cost per unit for each of your purchase lots, and Silo will automatically calculate the profit % for that item and the overall PO.
How do I access it?
When you open an existing purchase order, you'll see a Calculate settlement button in the footer that opens the settlement calculator. To see the button, you must have permission to view and edit prices on purchase orders. Depending on the state of the PO, you will also need one or more of the following permissions:
- Edit purchase orders before they are received
- Edit purchase orders after they are received
- Edit purchase orders after they are signed off
- Edit purchase orders after payments have been applied
How are each of the values determined?
- Total Revenue: All revenue less credits from sales directly from that lot and a proportional share of downstream lots (e.g. repacks)
- Inventory Total: The total cost of each of the lots. This is the cost/unit x total units ordered. This does not factor in credits
- Non-Inventory Total: The total $ amount of non-inventory items on the order
- Expenses: All expenses associated with the purchase lot and a proportional share of downstream lots (e.g. repacks)
- Profit $: Total Revenue - Inventory Total - Expenses
- This does not factor in non-inventory items or credits from your supplier
- Profit %: Profit $ / Total Revenue
- Total Paid: How much you have paid on this PO, this does include credits
- Balance Due: Inventory Total + Non-Inventory Total - Total Paid
FAQs
Q: Does this include revenue and expenses from repacked and transferred lots?
A: Yes
Q: How is revenue status determined?
A: Paid - all invoices for sales made from that purchase lot and its downstream lots are fully paid
Partially paid - at least one invoice is partially paid
Unpaid - no invoices are paid
Q: How are inventory counts determined?
A: We look at the inventory counts (return to shipper, sold, waste, and remaining) in terms of purchase lot units. If you repacked or transferred units, we translate those units back to purchase lot units.
Q: Why are the profit % and $ different in this calculator than in other parts of Silo, such as the Lot Details window?
A: This screen calculates profitability across all ordered units (including any that were returned), whereas the calculations used in Lot Details only consider the profitability of sold and wasted units.