Dec 17, 2015
The Profiteer App is meant to expose profit or margins on a sale by subtracting the cost price of goods sold from the selling price of the goods sold. A common business issue faced by many merchants is the effect currency exchange rates may have on their sales. A shop located in Canada may sell products to Canadians in Canadian currency, but the products sold may have been purchased and imported from the United States. Many merchants probably source their products from the United States, and it is considered to be one of the standard currencies by which most others are measured.
Currency Exchange and Profiteer App
The App has a preferences page that allows the merchant to turn on or off currency exchange tracking for sales. When currency exchange is turned on, the merchant has been prompted to select the currency they wish to make their sales in. We could just use the setting from Shopify but for the time being, the selection of the country to use is available from a country list dropdown. A shop selling goods in Brazilian Reals would select Brazil, and swith the selector to ON, before hitting the Save Currency Setting button.
When currency tracking is ON the Profiteer App will request the exchange rate for the selected country at midnight Eastern Standard Time and record the value for use in the following 24 hour period of time. Additionally the merchant will now be presented with a currency tracking selection per product. By default, all products are not tracking currency even if the shop has currency tracking ON. It is up to the merchant to cherry pick which products are tracking currency when recording sales. That setting is available when editing a product for cost of goods sold.
As a convenience, the latest value of the currency exchange is displayed, and the merchant has the option to use that exchange value in sales by ticking ON currency tracking.
Bulk Setting of Currency Exchange Settings
When the merchant turns ON currency tracking for the Shop itself, the Export COGS option will include an extra column in the CSV file with the current exchange rate for any products that have currency exchange ON. It is currently Column 10 in the CSV. If there is a value in that column of any kind, that implies the merchant would like currency tracking enabled for that product. A blank or empty value in that column implies no currency tracking is ON for the product. When importing the file, not only are COGS values updated to match the CSV, but the App will enable/disable currency tracking as well.
What Happens During a Sale
When a sale is recorded of a product, Profiteer App will first figure out if the shop has currency exchange rate tracking on or off. If the setting is ON the next question asked is whether or not the product has currency exchange tracking on or off. If currency exchange tracking is ON the App will take the cost price from Profiteer App, multiply by the current exchange rate, and then record that resulting value as the cost of goods sold for the product at that time.
The result is a profit or margin calculation that is much closer to reality! A merchant that buys some or all of their stock from the United States can set their cost prices in the currency of their shop, and know that Profiteer will convert that value to the equivalent in US dollars at the time of the sale.