A number of Small Business persons fail because they can’t Make any profit and eventually lose Business and Money due to wrong Product Costing.
One of my face book friends sent me a message which read, “I am looking for an Excel Costing Sheet Template. I have a problem calculating my Product Unit Costs. I Import most of my goods from China and incur various expenses at various points. What is the Format I can use to find the Cost of single Units?”
Now, in answering his question, I want to show how you can also use an Excel Costing Sheet Template to Cost your Products correctly like an “Auditor”. From the various expenses incurred, you can be able to come up with the correct Product Unit Costs using this Format.
Before you download this Costing Spread Sheet, I first want you to understand how to use this Template. However, to download, simply click on the link and you will be directed to my Google docs, click on file in the left hand corner and scroll down to download as and choose Excel from the drop down menu. The file will be downloaded and you can save it on your computer and will appear as shown in the image.
1. As you can see, the top area just requires relevant information relating to your purchase and does not contain any formula so you can customise the fields. If your invoices are in another currency other than your home currency such as dollar then you can put the exchange rate in cell B: 11 if no exchange rate is required then put 1.
2. Work out the actual total costs on the invoices paid or to be paid to the supplier and enter it in cell B: 14.
If you use road transport you can change the freight field to transport here include a total of all your air tickets and transport costs in cell B: 18.
If for example a cost such as insurance is not incurred, just delete the figure in the field to leave it blank. Make another total of any duties paid and enter it in cell D: 23. Do not forget to add any other smaller expenses such as lodging and meals.
3. When making money transfers and withdrawals for the same purchase, you incur bank charges so you can choose to make some provisions. For bigger businesses the amounts can be quite big and can require a provision but for a small business you can choose to ignore this by putting 0% in cells C: 25, C: 27 and C: 30. Add any agency fees or any other expenses incurred in cell D: 28 and customise accordingly.
4. The final stage is to list your Products under description, the value and the quantities as shown in area 4 in the image. You can as well put the codes if your products have codes. Please note that the total values or FOB under area 4 in the snapshot should add up to the value in cell B: 14.
In a very practical term, this is what this Costing Sheet will do. If say you are importing from China to Zambia, it will give you the total Cost of your Products in a shop in China and then add any other Small Costs to give you the total Cost of your Products in Zambia and further break the total Cost into Unit Costs. With an accurate Unit Cost, you can then add your margin and decide to keep your price Low or high and Make more Money.
About the Author:
Fixed Asset Consultant at Prosperity Agencies Limited with over 10 years practical experience in physical verification, bar-coding of assets and fixed asset software implementation +260 211 239859
Let's Get Connected: Linkedin | Facebook | Google Plus
Post a Comment