The Sales Capital Cost Replacement Calculator
Our SALES and CAPITAL COST REPLACEMENT CALCULATOR is more vital than ever…
Due to our current circumstances around combating the COVID-19 outbreak/Lockdowns forcing everyone online for business to business and the reduction of retail business, it’s totally reasonable to expect, or at least prepare for, a global slowdown – and perhaps even recession in Australia.
Two factors I've constantly encouraged business owners and managers to focus on – after cashflow – have always been the costs of bad debt write-offs and the cost of fixing mistakes.
Credit Matters has produced THE SALES and CAPITAL COST REPLACEMENT CALCULATOR to identify the cost of replacing capital lost when the account is written-off or mistakes have to be processed.
Following are a few examples of how many dollars are required from future sales to replace lost capital caused by poor decision-making and inadequate operating procedures.
| Invoice w/off ($) | A/C Bad debt w/off ($) | Cost of sale ($) | Net Profit % on w/off | Sales to replace w/off ($) | Cost of processing a mistake ($) | Sales to replace cost of processing ($) |
|---|---|---|---|---|---|---|
| 100 | 100 | 90 | 10% | 900 | ||
| 100 | 100 | 90 | 10% | 900 | 25 | 625 |
| 100 | 4% | 2400 | 25 | 625 | ||
| 100 | 4% | 2400 | 50 | 1250 |
Note: It is important to note, these figures do include all the costs involved in actually processing an account for write off. The calculator merely identifies the cost of replacing capital lost when the account is written off.
The actual cost for processing a mistake may vary according to your business and the amount of work required to process the mistake. Whatever the cost which has been calculated for costing purposes, 100 per cent of the cost is used as the cost basis for this calculation.
Try It! Calculate Your Costs
Select one of our three calculators below.
Based on a Net Profit of 10%
| Invoice ($) | Cost of sale ($) | Sales to replace w/off ($) | Sales to replace processing w/off cost ($) | TOTAL ($) |
|---|---|---|---|---|
| 100.00 | 90.00 | 900.00 | 250.00 | 1,150.00 |
| 200.00 | 180.00 | 1,800.00 | 250.00 | 2,050.00 |
| 300.00 | 270.00 | 2,700.00 | 250.00 | 2,950.00 |
| 400.00 | 360.00 | 3,600.00 | 250.00 | 3,850.00 |
| 500.00 | 450.00 | 4,500.00 | 250.00 | 4,750.00 |
| 600.00 | 540.00 | 5,400.00 | 250.00 | 5,650.00 |
| 700.00 | 630.00 | 6,300.00 | 250.00 | 6,550.00 |
| 800.00 | 720.00 | 7,200.00 | 250.00 | 7,450.00 |
| 900.00 | 810.00 | 8,100.00 | 250.00 | 8,350.00 |
| 1,000.00 | 900.00 | 9,000.00 | 250.00 | 9,250.00 |
Based on a Net Profit of 10%
| YTD Total W/off's ($) | Cost of sales ($) | Sales to replace w/off ($) | Cost of processing W/off's ($) | Sales to replace cost of processing W/off's ($) | TOTAL ($) |
|---|---|---|---|---|---|
| 100.00 | 90.00 | 900.00 | 2,500.00 | 25,000.00 | 25,900.00 |
Based on a Net Profit of 10%
| Cost of processing 100 claims ($) | Sales to replace cost of processing claims ($) |
|---|---|
| 2,500.00 | 25,000.00 |