Quick Overview of Financial Updates and Pricing Changes in Fohlio
Tax Treatment & Pricing Settings
We’ve updated how taxes work in Fohlio to make calculations more flexible across different regions and tax systems.
With this update, you can:
- Configure tax behavior to match your regional setup (e.g. VAT or Sales Tax)
- Override tax settings at the item level and for purchase orders
- Apply tax rates directly to client invoices
- Better understand how taxes impact costs, pricing, and margins
These improvements help you calculate more accurately, adapt to different workflows, and stay on track with your margin targets.
Overview
Tax settings are now updated and structured into the following:
- Project level from Procurement Settings
- Item-level Overrides
These settings directly impact:
- Cost price
- Client price
- Margins
- Purchase Orders
- Client Invoices
Key Updates to Tax Settings
We’ve updated tax handling in your settings to give you more control over how taxes are applied in cost calculations.
You’ll now find two key toggles that determine how taxes impact your pricing and margins.
1. Retail Prices Include Tax
This setting defines whether supplier prices already include tax.
- ON → Prices are tax-inclusive (common in Europe / VAT)
- OFF → Prices are tax-exclusive (common in the US)
Impact:
When enabled, the system removes tax from supplier price to calculate the true cost.
2. Taxable on Purchase
This defines whether your purchases are subject to tax.
- ON → Taxes are added to your cost (not tax-exempt)
- OFF → No tax applied on purchase (tax-exempt)
Impact:
When enabled, taxes are added to the cost price, increasing the total cost and affecting margins and client pricing.
3. Separate Tax Rates
You can define:
- Client Sales Tax → Applied to client invoices
- Tax on Purchase → Applied to procurement (optional)
Options:
- Use the same rate for both
- Or define separate rates for more complex scenarios
How Tax Affects Pricing
Tax settings directly impact calculations:
Cost Price
Affected by:
- Tax inclusion (retail prices toggle)
- Tax on purchase
- Customs & duties
- Internal costs
Example Logic
- Tax-inclusive price → tax is deducted → lower cost basis
- Tax applied on purchase → tax added → higher cost basis
Item-Level Overrides
You can override tax settings per item:
- Open item settings
- Switch to Item-level settings
- Adjust:
- Tax toggles
- Tax rates
Use case:
Different suppliers or regions within the same project.
You can also:
- Reset individual fields to project defaults
- Reset all settings at once
Margin Target Support
You can define a target margin at the project level to guide your pricing decisions and ensure profitability.
- Set your margin when creating a project, or update it anytime in Project Settings
- Fohlio automatically calculates your actual margin based on cost and client price
When your target isn’t met
If your pricing falls below the target margin:
- A warning indicator will appear
- Fohlio will suggest a recommended client price to help you reach your goal. You can apply the recommended price when you hover on the icon and press "Apply Recommended Price."
When your target is met
- A check indicator will appear confirming the condition
How to respond
You have full flexibility in how you handle this:
- Accept the recommended price and apply it directly
- Adjust pricing manually
- Reduce your costs — either by:
- Negotiating better supplier discounts
- Optimizing internal costs
Once you reach a suitable price, you can confidently use it when communicating with your client.
Procurement & Invoices
Tax settings are automatically applied to:
- Purchase tax → applied to Purchase Orders
- Client tax → applied to Client Invoices
Item-Level Overrides & Document Behavior
You can override tax settings at the item level, as well as when creating a Purchase Order or Client Invoice.
Behaviour when selecting multiple items in case of tax override:
- A single tax rate will be applied across all selected items
- If any item has a custom (overridden) tax setting, that rate will be prioritized
- Otherwise, the project default tax will be used
This ensures consistency within each document while still allowing flexibility at the item level.
Column Customization
Tax fields can be added as columns in tables and renamed.
Example:
- Rename “Sales Tax” → “VAT” for European workflows
Additional Cost Inputs
You can also include:
- Customs & Duties (%)
- Internal Costs
These:
- Apply across item quantities
- Increase cost basis
- Affect final pricing and margins
Best Practices
- Use project defaults for consistency
- Override only when necessary
- Align tax setup with your region (VAT vs Sales Tax)
- Regularly review margin impact after tax changes