The supplier raised the price. Did your shelf price follow?

Imagine a baqala in Al Qusais on a delivery morning. The drinks van arrives at eight, the driver is in a hurry, and the shop assistant counts the cartons, signs the note and stacks the bottles in the fridge. Nobody notices that the carton of 24 juice bottles now costs AED 55.20 before VAT instead of AED 48.00. The shelf still says AED 3.15.

Nothing goes wrong that day. The bottles sell, the till balances, the report looks normal. The loss shows weeks later, if at all, as a gross profit a little lower than it should be. Multiply that by the twenty or thirty products whose cost moves in a year, and a shop can give away a good part of its margin without one bad decision: just a decision nobody made.

The numbers behind one carton

These are example figures. The old cost per bottle was 48.00 ÷ 24 = AED 2.00. The new one is 55.20 ÷ 24 = AED 2.30, a rise of 15 %.

The shelf price of AED 3.15 includes 5 % VAT, and VAT is never profit: it belongs to the tax authority. So the price that counts is 3.15 ÷ 1.05 = AED 3.00 without VAT.

• Margin before: (3.00 − 2.00) ÷ 3.00 = 33.3 %.
• Margin now: (3.00 − 2.30) ÷ 3.00 = 23.3 %.
• The price that keeps 33.3 %: 2.30 ÷ (1 − 0.333) = AED 3.45 without VAT, 3.45 × 1.05 = AED 3.6225 with VAT, rounded up to AED 3.65.

If the shop sells ten bottles a day, keeping the old price costs AED 3 a day, about AED 90 a month, on this one product (again, example figures).

The warning at receiving

In CreekPOS the check happens where the new cost enters the system: at receiving. When the unit cost on a delivery line is 10 % or more above the product's last cost, the line shows a warning like this:

Cost was 2.00, now 2.30 (+15 %). Margin now 23.3 % at 3.15 (was 33.3 %). Suggested price 3.65 keeps 33.3 %.

Under it are two buttons: Apply 3.65 and Keep the price. One tap applies the new price, and the tills receive it like any other price change. Keeping the price does nothing at all. Sometimes you hold a price on purpose, against the shop next door or for your regulars, and that is your choice.

How it works, in plain terms:

• It is plain arithmetic, done the moment you receive. The margin is always worked out on the price without VAT, and the suggested price is rounded up to the next AED 0.05, never below the margin it keeps.
• The 10 % is your setting (Settings → Selling). Raise it if your suppliers move prices in small steps you do not want to hear about; lower it if your margins are thin. Zero switches the warning off.
• It appears wherever stock is received: the receive page, receiving a purchase order, and the review of an invoice read from a photo.
• Changing the price needs the right to change prices. Whoever receives sees the warning; someone without that right leaves the price to a manager.

A margin floor and the "squeezed" list

A warning on the receiving screen is easy to miss on a busy morning. For that you can set a margin floor, for example 25 %. Any delivery line whose margin at the current price falls under it is marked squeezed. In the example, 23.3 % is under 25 %, so the juice is on the list.

Squeezed lines are listed on the margins page with the price that would restore the margin, appear in the owner's daily summary, and raise a Margin squeezed owner alert, once per product and delivery. A line leaves the list by itself as soon as its margin is back above the floor: you applied the price, changed it by hand or lowered the floor. The floor is off until you set one.

Good to know

• It never changes a price by itself. Every new price is a tap by a person.
• It compares the delivery with the product's last cost. A product without a selling price gets the costs only. Where you keep the supplier's price list in CreekPOS Online, a delivery that matches the list does not warn again: the list was reviewed when it came.
• A lower cost does not warn. Only a rise of your threshold or more does.
• It is not a forecast. It tells you what the delivery in your hands does to your margin today.
• Where: CreekPOS Online on every plan, from Retail up; the buy-once desktop program from Silver up, in its delivery dialog.

Tips for delivery mornings

1. Receive the delivery in the system the same day, before the stock reaches the shelf.
2. Set the floor near the margin you actually need to cover rent and wages, not the one you hope for.
3. When a price changes, change the shelf label at once, so the shelf and the till agree.
4. Once a month, open the margins page and clear what is left on it.

See the cost-rise warning on the smart stock page and the stock alerts chapter of the manual.