Customer ABC Code Update

Modified on Tue, 07 Jul 2015 11:02 by Greg Andrews — Categorized as: Accounts Receivable , Address Book


General Information

Default Menu Location: Transaction >> Address Book >> Customer ABC Update

Screen Name: ABCCUST

Function: Update the Customer ABC codes based on percentages of sales, profit, and average days to pay.

Customer ABC Code

Customer ABC Code


What are ABC Customer Codes?

ABC analysis is a business term used to define a technique used to categorize customers based on a specified criteria.

ABC analysis provides a mechanism for identifying which customers provide the most business to an organization based on sales, profit, or average number of days to pay. When carrying out an ABC analysis, customers are valued with the results then ranked. The results are then grouped typically into three bands. These bands are called ABC codes. In Adjutant, the percentages of each group can be customized based on user preference (must equal to 100%).

Overview

In the Sold To screen, there are three fields labeled ABC Code. The first two fields are meant to show you a customer's contribution to sales and profit. The third field is indicative of the customer's payment time (average days to pay).

Sold To ABC Info - Click for full size

Sold To ABC Info - Click for full size


Updating ABC Codes

The Customer ABC Update screen allows you to update any of the three codes based upon a percentage allocation and date range.

Sales: Invoiced amount based on the given Date Range and selected Item Categories.

Profit: Gross profit on invoices based on the given Date Range and selected Item Categories.

Item Categories do not need to be selected if you are not using them as a filter. By selecting none, you are effectively including all of them.

Days to Pay: Cash Receipts based on the given Date Range and Invoice/Due Date selection.

We recommend using Due Date for the Days to Pay calculation as it is a more realistic indicator of a customer's willingness to pay on time.

The program will run after you have entered percentages equaling 100% for each code and clicked the Update button. Upon completion, it will export a file to the Adjutant folder with a list of customers, their old codes, and their new codes.

Filters

Item Categories: Select specific item categories if you wish to exclude some types of items from the sales and profit calculations.

Include Frt/Packing: Freight and Packing charges are excluded by default. Check this box to include them in the sales and profit calculations.

Invoice/Due Date: Select which date you wish to calculate the Days to Pay code from.