Fourth Analytics Adaco: Cost of Sales

Overview

This article is designed to help users understand what the actual Cost of Sales (COS) figure is, how it is reached, and how it may differ from the Theoretical Cost of Sales figure in Fourth Analytics.

The Cost of Sales (COS) Closed Periods tab is populated with data only if the core Purchasing & Inventory solution contains outlet sales values (includes all sales submitted by EPOS i.e. Matched and Unmatched PLUs).

If a period has not yet been closed in the core Purchasing & Inventory system, data will not be available for this period.

Top Banner Figures 

The Summary banner displays the actual Cost of Goods sold (Actual COGS%) as a percentage of Outlet Sales Revenue (net of tax). COGS is calculated based on actual consumption of products (usage). 

The banner displays the opening and closing stock (Inventory) figures and actual usage in monetary terms. 

Fig.1 – Figures in banner at top of tab

Example

During a period, you started with 500 bottles of Coca-Cola, had 300 delivered, and finished with 690 because 100 were sold and 10 were transferred to wastage. 

The recipe for a bottle of Coca-Cola has a recipe cost price of £1, and a recipe selling price of £4 (with a PLU linked to the EPOS system). 

However, there was a promotion offering 10% discount on the selling price, so Coca-Cola is being sold at 90% of the normal recipe selling price. The COS headlines would be as follows:
 

Opening to Closing Bridge Value

This graphic displays how the actual usage figure has been reached, as well as illustrates the relative size of stock holding to stock movements. 

• Light blue columns show the stock increasing
• Dark blue columns show stock decreasing
• The size of the column reflects its value

Moving from left to right: 

• The left-most column shows the value of Opening Stock (closing Inventory from the previous Inventory period)
• The next column displays the value of Products received
• Then, the net movements of Requisitions and Transfers into/out of the chosen Location are shown
• The second to last column shows the Closing Stock 
• The final column displays the Actual Usage 

When all Locations in a company are selected to display, the net Requisition/Transfer value should be zero. If select Locations are chosen, Requisitions/Transfers and Adjustments may be negative or positive values. 

The Receiving value would normally be positive or zero (unless returns are greater than what has been received), and Usage values would normally be negative or zero.

Typically, a Location’s Outlets will not have a COS, as no sales are registered against the Outlet, and any stock movements should come only from purchases, transfers, requisitions or adjustments (which will include Inventory variances). 

Fig.2 – Opening to Closing Bridge – Value Graph

Actual COS % by Outlet - Value 

This report shows the 10 Outlets with the highest COS% for the chosen time period. 

Fig.3 – Actual COS% by Outlet – Value Graph

Actual Usage % by Property – Value

This table displays the same opening-to-closing transactions as Fig.2 and categorises the data by Property (default listing in alphabetical order).

It also displays the Net Sales value, with the COS% in the far right column.

The total figures are at the bottom of the table, which correspond to the figures in the banner at the top of the Cost of Sales tab (Fig.1).
 

 
Fig.4 – Actual Usage % by Property – Value Table

Actual Usage % by Outlet – Value

This table displays the same opening-to-closing transactions as the table above, but instead categorises the results by Cost Category and Outlet (default listing in alphabetical order).  

 
Fig.5 – Actual Usage % by Outlet – Value Table

Fourth Analytics: Adaco