Effective analysis of uncompleted or canceled work orders is key to minimizing financial losses.
Even a work order that was closed as unsuccessful may still involve payments received, work performed, products written off, employee bonuses, and taxes. The “Unsuccessful Work Orders Profit” report helps you analyze the financial results of such work orders separately.
In this article, we’ll explore how to use Orderry to evaluate the financial results of work orders that were closed as unsuccessful.
In this guide, you’ll learn:
How profit is calculated and lost funds are recorded.
How to flexibly customize the report’s settings and filters to suit your needs.
How checking the box for VAT refunds changes the financial metrics.
How the FIFO and FEFO methods affect the calculation of cost of goods sold.
In Orderry, profit from an unsuccessfully closed work order is calculated using the following formula:
Profit = (Payments) − (Cost) − (Employee Commissions) − (Taxes).
Payments — funds actually received for this work order.
Cost — expenses for performing work/services and the cost of actually written off products.
Employee Commissions — the total amount of bonuses or payments to employees for fulfilling this work order.
Taxes — all tax deductions applicable to the work order.
How to generate the report
The “Unsuccessful Work Orders Profit” report is generated on the Reports > Finance > Unsuccessful Work Orders Profit page for unsuccessfully closed work orders, sorted by closure date.
Important:
To access this report, your role must have the corresponding permission—Unsuccessful Work Orders Profit—enabled in the Reports permissions section.
If a work order was closed on a past date, it will be included in the report based on the specified close date, not the actual date.
There are several parameters used to generate the report.
Period allows you to select the time frame for the report: today, yesterday, this week, this month, last week, last month, this year, last year, or to specify dates manually.
Location allows you to select one, several, or all locations if there is more than one.
Order Type allows you to view profit by different order types. For example, all work orders except warranty work orders.
Order Status allows you to select which unsuccessful statuses to include when calculating work orders.
Checking the box “Exclude refundable purchase taxes from cost” allows you to view profit excluding refundable taxes. See further in this article for details on how this checkbox works.
Set the desired parameters and click the “Apply” button.
The report is generated with key data on the financial components of work orders.
In addition to the standard columns for cost, employee bonuses, discounts, and taxes, two new columns have been added: Payments and Unpaid Amount.
Payments displays the funds actually received for these work orders.
Unpaid amount shows the difference between the total cost of the work order and the amount of payments made—that is, the amount of potential profit not received (lost).
You can sort the table by column by clicking on the name of the desired column. Positive profit is displayed in green, and negative profit in red. The results for each column are displayed at the bottom of the page.
You can also customize which columns are displayed in this report. To do this, click the table button and check the boxes next to the desired columns.
How VAT reimbursement affects profit calculation
If you are a taxpayer and your company reimburses VAT on purchases, check the box “Exclude refundable purchase taxes from cost.” This will deduct the amount of inclusive taxes paid during the product posting from the cost.
Then the profit is calculated as follows:
Profit = Total amount (paid by the client, including discounts) − Cost excluding refundable taxes − Employee salaries − All taxes.
For example, you bought a phone battery for €120 (including €20 VAT) and sold it to a client for €200. Employee salary is €30, sales taxes are €10.
Profit if you are NOT a taxpayer:
200 (sale) − 120 (cost) − 30 (salaries) − 10 (taxes) = 200 − 120 − 30 − 10 = €40
Profit if you are a taxpayer and you are reimbursed for VAT:
200 (sale) − (120 − 20) (adjusted cost) − 30 (salary) − 10 (taxes) = 200 − 100 − 30 − 10 = €60
How product write-offs work: FIFO, FEFO, and cost calculation
Non-serial products are written off from the warehouse using the FIFO (First In, First Out) method, and products with an expiration date are written off using the FEFO (First Expire, First Out) method. If products from several batches are written off in a work order, the cost price in a closed order is calculated as the sum of the cost prices of the units from these batches.
For example, we have Power Banks from two batches:
1 unit at a cost of €200 (batch received earlier)
2 units at a cost of €100
If we write off 2 units in the order, they are taken as follows:
1 unit from the first batch (€200),
1 unit from the second batch (€100).
Total cost in a closed order = (1*200) + (1*100) = €300.
Report export and advanced analysis
You can print the report or export it to your computer as an Excel file. The Excel file contains more detailed information. Click on “Actions” and select the desired action.
The exported report has additional columns that allow you to separately analyze the price, cost of products, and profit with and without VAT. This allows you to see not only the overall financial result of the order, but also to understand what exactly it consists of.
Profit excluding VAT = price excluding VAT - cost excluding VAT - employee bonuses.
Profit including VAT = price including VAT - cost including VAT, where:
price including VAT = price excluding VAT + taxes applied to the order;cost including VAT = cost excluding VAT + VAT (taxes applied when the product is posted).
Actual profit = Payments (amounts actually paid by the client, taking the discount into account) - Cost (of used spare parts, work) - Employee commissions - Taxes applied to the order
This indicator takes into account the refunded VAT as a reduction of the cost price and shows the actual financial result of the order.
To summarize, profit excluding VAT shows the effectiveness of the order without taking into account taxes, only the price, cost, and bonuses. Profit including VAT - takes into account taxes in the price and cost for financial reporting. Actual profit - shows how much money is actually left after all expenses and VAT refunds.