Help! My boss said I have priced the customer wrong and lost the business 1000s of pounds!

[Icecream08]

So my boss said I have priced the customer wrong and lost the business 1000s of pounds

If the trade price for an item £50 +VAT (Or tax at 20percent) and the customers is a reseller so gets 20percent off trade, how much would you invoice the customer excluding VAT

For this I invoiced £40+VAT calculated at £50 x 0.8
Whiles my boss said it should be £41.67+VAT calculated at £50/1.2

My colleagues all would have done the same but can some one explain why I am wrong?

 

[tkhunny]

First off, no matter what WORDS are used, you should consider what your "Boss" intended as being correct.

Second, I might read the WORDS like this:
20% * £50 = £10
£50 - £10 = £40 = Price to Reseller

However it's not perfectly clear to me that something else may be intended.

Third,
Perhaps, £50 contains 20% Markup, and we're really just discounting the markup, then:
Purchase + Markup = Trade
Purchase + 20%*Purchase = £50
Purchase * (1.2) = £50
Purchase = £50 / 1.2 = £41.67 -- We're selling to the reseller at Purchase Cost. Pretty good deal.
If this is the case, then pretty clearly, your £40 is BELOW your Purchase Cost. Not likely to be acceptable in the long run.
Your boss may have intended, "Get that 20% markup out of there!"

Not enough information to establish who is "wrong", but there is enough information to establish what your Boss intended.

Good luck.

 

[Icecream08]

Thank you for your explanation. I'm just really annoyed as its just really insulting how my boss said this was "Basic maths"

The conversion was literally:
Me: what's reseller price
Boss: 20percent off trade

Most of our customers are trade so we always use the trade price as base for other customers. The cost of this particular item was actually £31 something +Vat.

 

[tkhunny]

Thank you for your explanation. I'm just really annoyed as its just really insulting how my boss said this was "Basic maths"

The conversion was literally:
Me: what's reseller price
Boss: 20percent off trade

Most of our customers are trade so we always use the trade price as base for other customers. The cost of this particular item was actually £31 something +Vat.

Words aren't perfect. Each has his/her own interpretation. Neither you nor your boss appear to understand that there might be different ways to take the exact same words. You're annoyed and your boss is demeaning. Not a good situation. We don't like it when words have different meanings. This is why we talk. The word "markup" is one such culprit. There are at least two (2) different kinds. The word, by itself, doesn't clarify.