Sales price vs cost price: how pricing and last cost work

What it is

Every product or service in Usystems has two key prices:

• Sales price: the amount you charge customers when you sell the item
• Last cost: the most recent price you paid when you purchased the item (also called "cost price")

The difference between these two is your profit margin on that item.

Why it matters

Tracking both prices accurately is essential for:

• Profitability: You need to know your actual cost so you can set prices that make money
• Reporting: Your accounting reports (gross profit, margins, cost of goods sold) depend on accurate cost data
• Decision-making: When costs rise, you can quickly see whether your sales prices still work
• Inventory management: You can spot fast-moving items with good margins and slow items that tie up cash

How it works in Usystems

Last cost is updated automatically whenever you receive inventory:

1. When you create a Cash Purchase or Purchase Order with a cost price, Usystems remembers that price
2. When goods arrive and you confirm the receipt, the product's last cost updates to the new price
3. If you receive the same item at different costs (e.g., from different suppliers), the last cost reflects the most recent purchase
4. Last cost is used to calculate the cost of goods sold (COGS) on your financial reports

Sales price is set manually:

1. You can set a price when you create a new product
2. You can update it at any time from the product details page
3. You can optionally sync sales prices from your purchase documents (see "Updating sales prices from purchase documents")
4. You can change prices on an active product safely using price change workflows (see "Changing prices safely on an active product")

Where you see it

• Products & Services page: shows both the current sales price and last cost for each item
• Sales invoices and receipts: use the current sales price at the time of sale
• Cost reports: use the last cost to calculate gross profit and margins
• Purchase documents: where you enter cost prices for incoming inventory