Credit Matters

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, it’s totally reasonable to expect, or at least prepare for, a global slowdown – and even recession. As such, the importance of prompt payment, PLUS maximising efficiency – in every department of your business – can determine the outcome between financial survival – or loss. Put simply, every business needs to be a prompt “solution provider” to their clients, (and prospective clients) while making as few mistakes as humanly possible throughout the process.

Over the years, two of the factors that I have constantly encouraged business owners and managers to focus on – after cashflow – have always been:

  1. the costs of bad debt write-offs and

  2. the cost of fixing mistakes.

In an effort to help business owners and managers focus on these two really important, but regularly overlooked aspects of business, Credit Matters has a produced THE SALES and CAPITAL COST REPLACEMENT CALCULATOR. Its function is to identify the cost of replacing capital lost when the account is written-off or mistakes have to be processed.

Once you realise the actual costs involved, I hope that will motivate you into action of addressing points 1 & 2 above.

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 ($)Net Profit % on w/offSales to replace w/off ($)Cost of processing a mistake ($)Sales to replace cost of processing ($)
1001009010%900  
1001009010%90025625
 100 4%240025625
 100 4%2400501250

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.

Use the form below to calculate the replacement sales required to cover your write off.

Based on a Net Profit of 10%

Invoice ($)Cost of sale ($)Sales to replace w/off ($)Sales to replace processing w/off cost ($)TOTAL ($)
100.0090.00900.00250.001,150.00
200.00180.001,800.00250.002,050.00
300.00270.002,700.00250.002,950.00
400.00360.003,600.00250.003,850.00
500.00450.004,500.00250.004,750.00
600.00540.005,400.00250.005,650.00
700.00630.006,300.00250.006,550.00
800.00720.007,200.00250.007,450.00
900.00810.008,100.00250.008,350.00
1,000.00900.009,000.00250.009,250.00
Use the form below to calculate the replacement sales required to cover your write off for the year to date.

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 ($)TOTAL ($)
100.0090.00900.002,500.0025,000.0025,900.00
Use the form below to calculate the cost and replacement sales required to cover your claims processing.

Based on a Net Profit of 10%

Cost of processing 100 claims ($)Sales to replace cost of processing claims ($)
2,500.0025,000.00

Promote Your Business

Credit Matters Business Club - Professionals When You Need Them

If you are a specialist supplier of financial risk management products and services, then you need to be listed in Credit Matters Better Business Club.

Read More
Promote your business with Credit Matters