CostingNet

I recently experienced difficulties with the conventional costing method used by our merchandising department. The merchandisers were using an Excel worksheet to calculate product costs, which would have been fine, but there were no check points for average price and comparison. Consequently, multiple versions, copies, and various formats of the costing sheet were being created, making it challenging to create comparison reports based on these individual Excel files. As a result, no average cost checking or comparison was being made during the costing process. Moreover, misunderstanding and confusion arose due to the numerous versions and formats of costing sheets created by each merchandiser, leading to a loss of vital information when there was a change in merchandiser.

Fortunately, our merchandising department eventually adopted a software tool that centralized all the costing sheets and provided a system for all merchandisers. The system standardized the inputting of costing elements into the database and most importantly, created comparison reports for all cost elements. These reports compared fabric cost, trim cost, labor cost, subcontract cost, and transportation cost, enabling our company to identify the cheapest cost elements to improve our gross profit. The quote comparison report also found the highest margin customers, allowing us to focus on those profitable customers and end up with higher margin orders.

In summary, the adoption of this software tool brought a lot of benefits to our merchandising department. It standardized the costing process, reduced confusion and misunderstanding, and significantly improved our gross profit. So, I would highly recommend this software tool to any company looking to streamline their costing process and improve their profitability.