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How to manage the profitability of a quote during its creation?

Updated over a month ago

Business Context and Objective

Creating a quote is not just about listing services: it's a strategic step where the project's profitability and the viability of your commercial commitments are at stake. You must be able to answer two critical questions in real time:

During quote creation: "Am I pricing correctly?"

During negotiation: "How low can I go without killing my margin?"

Furious provides you with automatically calculated profitability indicators from the moment you enter your rate card line items, allowing you to manage your margins even before the project's signing.

Understanding Profitability Indicators on a Quote

Furious offers you two key indicators to assess the profitability of a quote:

Gross Margin

The gross margin is the difference between the revenue sold to the client and the estimated purchases on the quote.

Formula: Gross Margin = Revenue (CA) – Purchases

Example:

• You sell a service for 10,000 € VAT excl.

• You expect 2,000 € in supplier purchases

Gross Margin = 10,000 - 2,000 = 8,000 €

The gross margin is directly visible in spreadsheet mode when creating your quote (see How to create quotes using spreadsheet mode).

Net Margin

The net margin goes further by integrating forecasted HR costs related to the project's execution.

Formula: Net Margin on Quote = (TJM - CJM) × Number of Days Sold

Where:

TJM: TJM is the sales Average Daily Rate (price charged to the client)

CJM: CJM is the internal Average Daily Cost

Number of Days Sold: Total quantity of days planned on the quote

Example:

• You sell 10 days at 600 €/day (TJM)

• The internal cost of the resource is 400 €/day (CJM)

Net Margin = (600 - 400) × 10 = 2,000 €

This net margin allows you to assess the actual profitability of the project considering your internal production costs.

💡 Tip: The net margin is particularly relevant for services expressed in days or hours. For unit line items (licenses, purchases), the gross margin indicator is preferred.

Where to View Profitability During Quote Creation

On the Quote Being Edited

When creating or modifying a quote, you can access the "Net Margin" indicator in real time directly on the quote.

This indicator updates automatically with each rate card line item modification, allowing you to see the impact of your adjustments instantly.

In Monitoring Views

Once the quote is saved, you can check the forecasted profitability from:

Business > Quote List: "Net Margin on Quote" column

Business > Quote Pipeline: indicator visible on each quote card

Project > Project [List]: "Net Margin on Quote" column

These views allow you to compare the profitability of several quotes and quickly identify the most viable proposals.

⚠️ Attention: For the net margin to be calculated correctly, your Average Daily Costs (CJM) must be filled. Furious applies an automatic hierarchy: Line CJM > User CJM > Skill CJM > Business Unit CJM.

Configure Your Costs for Accurate Calculation

The accuracy of your profitability indicators relies on correct cost configuration.

Average Daily Cost (CJM) Hierarchy

Furious follows a hierarchy to determine which CJM to use for each rate card line item:

Specific CJM: entered directly in the rate card line of the quote (field "Daily Cost")

User CJM: from the user profile, if a person is assigned to the line

Skill CJM: if a skill is associated with the line

Business Unit CJM: as a last resort

💡 Tip: For the closest profitability estimation, assign anticipated users directly on the rate card lines of the quote. Their individual CJM will be automatically considered.

Enter Purchase Cost on Lines

If you engage external providers or freelancers, enter their purchase cost directly via the "Purchase Price VAT excl." field on the relevant rate card line.

Concrete Example:

• You sell a service at 1,000 €/day

• You use a freelance costing you 500 €/day

• By entering this purchase cost, your net margin will be calculated accurately: (1,000 - 500) × number of days

⚠️ Attention: If a value is present in the "Purchase Price VAT excl." field, it will take priority over the CJM for the net margin calculation.

Simulating the Impact of a Discount on Profitability

During a commercial negotiation, you must quickly assess the impact of a discount on your margins.

Apply a Discount on the Quote

Furious allows you to apply a discount in three different ways:

1. On a Single Rate Card Line Item

In the quote editing, expand the relevant line and use the "unit price variation in %" field. Enter a negative number (e.g., -10%).

2. On Multiple Lines Dynamically

Select the relevant lines, click the calculator icon in the options bar, then enter the discount percentage. A discount line will be automatically created and updated if you modify your sales prices.

3. On the Entire Quote

Use the "Discount" field available directly on the quote to apply a global reduction.

For more details, see the article How to apply a discount on my quote.

View the Impact in Real Time

Once the discount is applied, the net margin indicator recalculates automatically. You can instantly check if the discount requested by the client remains compatible with your profitability goals.

Practical Case: "The client requests -10%, is it profitable?"

Initial Situation:

• 20,000 € VAT excl. quote

• Estimated net margin: 4,000 € (20% margin)

Applying a -10% Discount:

• New amount: 18,000 € VAT excl.

• New net margin: 2,000 € (11% margin)

→ Decision: The net margin drops from 20% to 11%. If your minimum profitability threshold is 15%, this discount compromises the project's viability.

💡 Tip: To test different scenarios without impacting your main quote, use the Duplicate a quote feature. You can create multiple versions and compare their profitability before presenting them to the client.

Best Practices for Optimizing Margin Management

Configure Your CJMs Upfront

Ensure that Average Daily Costs are filled for all of your users, skills, and Business Units. A missing CJM can skew profitability estimation.

Assign Resources from the Quote

Once you've identified the anticipated profiles for executing the project, assign them directly to the rate card lines of the quote. Their individual CJM will be automatically considered, ensuring a more precise estimate.

Compare Multiple Pricing Scenarios

Don't hesitate to duplicate a quote to test different pricing or resource assumptions. This allows you to present the client with the most balanced option between commercial competitiveness and profitability.

Use Spreadsheet Mode for Complex Quotes

The spreadsheet mode automatically displays the gross margin for each line. It's a valuable tool for managing the profitability of multi-skill or multi-deliverable quotes.

Checks and Prerequisites

To fully benefit from the profitability indicators in Furious, ensure that:

Average Daily Costs (CJM) are filled for your users, skills, and Business Units.

Rate card lines are expressed in days or hours for the net margin to be calculated.

• For subcontracted services, the "Purchase Price VAT excl." field is filled on the relevant lines.

• You have access to the Business module to access the indicators and modify rate card lines.

⚠️ Attention: If your rate card lines are expressed in units (licenses, packages), the net margin will not be calculated automatically unless an amount is specified in the "Daily Cost" or "Purchase Price VAT excl." field.

To Go Further

Key Takeaways

Furious allows you to manage the profitability of your quotes in real time through gross and net margin indicators. By correctly configuring your Average Daily Costs and simulating the impact of discounts directly in the quote, you make informed commercial decisions and ensure the financial viability of your projects before signing.

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