Sales Margin is the difference between the revenue you earn from a sale and the cost of making that sale.
For example, if you sell a product for $100 and it costs you $50 to make, your sales margin is 50%.
Sales margin is an important metric because it shows how much profit your company is making on each sale. If your sales margin is high, you're making a lot of money on each sale. If your sales margin is low, you're making very little money on each sale.
Sales margin is also important because it helps you determine your break-even point. If you know how much it costs you to make a sale, and you know what your sales margin is, you can figure out how many sales you need to make in order to break even.
It can be difficult to calculate Sales Margin directly inside of Xero; that's where Causal comes in.
Causal is a modelling tool which lets you build models on top of your Xero data. You simply connect Causal to your Xero account, and then you can build formulae in Causal to calculate your Sales Margin.
Causal lets you build models effortlessly and share them with interactive, visual dashboards that everyone will understand.
In Causal, you build your models out of variables, which you can then link together in simple plain-English formulae to calculate metrics like Sales Margin. This makes your models easy to understand and quick to build, so you can spend minutes, not days, on your models.
When you're done, you can share the link to your model with stakeholders. They'll be able to view your model's outputs in a visual dashboard, rather than a jumble of tabs and complex formulae. The dashboards are interactive, letting viewers tweak your assumptions to see how they affect the model's outputs.
Causal lets you add visuals in a single click, letting you plot out graphs and distributions for metrics like Sales Margin.