Quote to Cash Margin Calculator
See the real profit margin left on a deal once discounts and commissions are applied.
Result
How it is calculated
The tool works down from the quote to the profit that is left. net_price = quote_price × (1 − discount ÷ 100), commission = net_price × commission ÷ 100, net_profit = net_price − cost_of_goods − commission and margin = net_profit ÷ net_price × 100. Note that commission is charged on the discounted price, not the list price, and the margin is a share of the discounted price, not of the original quote. The quote and cost of goods are money amounts for the whole deal, the discount and commission are percentages. A loss-making deal returns a negative profit and margin, printed with the sign before the currency (-$1,180.00). A quote of zero, a discount of 100% or more, a commission above 100% or any negative input returns no result. Overheads such as shipping, support or payment fees are not included unless you add them to the cost of goods.
Worked example
A deal is quoted at $10,000. The cost of goods is $5,500, you give a 15% discount and pay 8% commission. Net price: 10,000 × (1 − 0.15) = $8,500.00. Commission: 8,500 × 8% = $680.00. Net profit: 8,500 − 5,500 − 680 = $2,320.00. Margin: 2,320 ÷ 8,500 = 27.29%.
With no discount the same deal would keep a 37.00% margin, so the discount costs about ten points of margin.
Common mistakes
- Calculating the margin on the original quote. Here it is measured against the discounted price ($8,500), which is why 27.29% is not 2,320 ÷ 10,000.
- Assuming commission is on the list price. The tool charges it on the net (discounted) price, so check how your commission plan is actually defined.
- Confusing margin with markup. Margin divides profit by the selling price; markup divides it by the cost, and the two percentages are different for the same deal.
- Leaving out costs that scale with the deal, such as delivery, implementation or payment fees. Add them to the cost of goods to see the true margin.
- Entering the discount as the new price. The field is a percentage off the quote, so a 15% discount is 15, not the discounted amount.
About this calculator
Quote-to-cash (QTC) is the end-to-end business process that runs from generating a sales quote through configuring and pricing a deal, getting it approved, closing it, and finally collecting payment. This calculator focuses on one critical checkpoint in that process: the true net margin left on a quoted deal after everything that eats into revenue is deducted.
Starting from the quoted (list) price, the calculation subtracts any discount offered to win the deal, then subtracts the cost of goods sold (COGS) — what it actually costs to deliver the product or service — and finally subtracts sales commission paid on the deal, leaving the real profit margin the company keeps.
Sales operations teams, deal desks, and finance/CFO teams use this kind of margin check before approving a discount, since a salesperson chasing a big discount to close a deal faster can unknowingly push a deal's margin down to an unprofitable level once commission and COGS are factored in — this calculator makes that true margin visible before the deal is signed.
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