Updated Margin Calculation
Understanding the Old Margin Calculation (and Why to Switch)
If your account is set to Margin (old calculation), you’re using the original way Quotient calculated margin on quote items. This method didn’t always handle negative values correctly – particularly when costs or prices were reversed, such as in credits, refunds, or stock returns.
What’s Changed
We’ve now introduced an updated Margin option that calculates margin the same way you’d expect from accounting or finance systems. The new method ensures that negative costs and prices produce accurate positive margin percentages, so your profit figures always make sense.
Old vs New
| Cost Price | Unit Price | Profit | Margin |
|---|---|---|---|
| +100.00 | +125.00 | +25.00 | +20% (no change) |
| -100.00 | -125.00 | -25.00 | -20% (old method) |
| -100.00 | -125.00 | -25.00 | +20% (new method) |
As you can see, the old calculation flipped the margin signs when costs or prices were negative – which could make your totals look wrong. The new calculation corrects this behaviour.
Why Switch to the New Margin
Switching to Margin (i.e. the new calculation) means:
- Accurate margin percentages in all situations
- Consistency with accounting conventions
- Clearer profit reporting in your quote totals
Once you make the switch, all new quotes will use the improved formula. Existing quotes will keep their original prices and totals, but the margin % shown may change to reflect the new, more accurate calculation.
Thinking About Switching to Markup?
While Margin focuses on your profit as a percentage of sale price, Markup calculates your profit as a percentage of cost. For many businesses, Markup feels more intuitive when setting prices — especially if you’re working directly from supplier costs.
If you’re curious, learn more about Margin vs Markup to see which is the best fit for how you price your work.