Nextian CPQ automatically calculates both profit (in $ amount) and percentage margin for each quote line item, along with a roll-up for the entire quote.
These values are synced to the opportunity (via the syncing quote) and can be used for:
- Sales Funnel Reporting — e.g., identifying the most profitable product sold after discounts.
- Quote Approvals — e.g., automatically approving quotes with over 20% margin, while routing others to the Head of Sales for review.
The following rules apply to how quote profit is calculated:
- For new line items (or the new portions of Replace or Re-Term), new MRR is always the booked MRR (i.e., sourced from the price book).
- Old MRR and Old Monthly Recurring (MR) Profit are always based on the current values read from the associated service.
- Old MR Profit is always calculated as gross profit, since price book profit is always gross.
For Re-Term quote line items, the Monthly Recurring Profit Uptick/Downtick is calculated as the difference between:
(New MRR - Service::Cost of Elements) - (Old MRR - Service::Cost of Elements)
Which simplifies to:
(New MRR - Old MRR)
This reflects the assumption that service costs remain constant during a Re-Term, as no service elements are changed — only the revenue component is updated.
