Model Summary
The Cost per Transaction model is used to forecast costs that take place during each customer sales transaction.
You may also use this model to forecast any physical inventory components that are included in the production and delivery of your product or service.
To forecast inventory simply input a cost per unit for the material, link it to the appropriate revenue streams and specify how many units of the material are included in each sales transaction for each of the revenue streams specified.
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Cost Category
The Cost Category field will determine where this cost will be placed on the income statement, and whether it will be included in specific analytics.
Select a category based on the following criteria:
Cost of Revenue: If this cost is directly used to produce, and provide, your products or services to customers.
Sales & Marketing: If this cost is used to attract, acquire or maintain new, existing or current customers. If Sales & Marketing is selected this cost will be included in the overall Cost of Customer Acquisition.
General: If this is a cost that generally contributes to the overall operations of the business or project, but is not directly tied to customer acquisition or revenue production.
Credit Terms (Days to Pay)
The average number of days between the day this cost is incurred and the day it has to be paid.
Cost per Transaction or Unit
The cost incurred for each sales transaction (if inventory, then the cost of a single unit of inventory).
# Days Extra Inventory on Hand (if Held in Inventory)
The amount of inventory held on hand beyond the amount expected to cover the forecasted sales for the month.
Example: If during a 30-day month we expect to sell 90 units of inventory, and we want to keep a buffer of 15 days on hand just in case we have higher than expected sales, then based on our forecast we should expect to have 45 units of inventory left over at the end of the month (90 / 30 x 15).
# of Days to Receive Shipment (if Held in Inventory)
The number of days it takes between submitting the order for a new shipment of materials and the day it's actually received.
Revenue Module
Choose the Revenue Streams you would like to associate with this cost.
Units per Transaction (if Held in Inventory)
Enter the number of units (however measured in the cost per unit field) that are used to produce and fulfill each sales transaction of this product or service.
+ Add Revenue Module
Allows you to include additional revenue streams that use this cost or material to provide a product or service.