Gross Margin
The Accountant's Dictionary
Fri, Jun 19, 2026
Gross margin is the percentage of revenue remaining after deducting cost of goods sold or direct cost of sales.
What Gross Margin means in business operations
Gross Margin is explained here in the context of real finance, payroll, HR, and ERP workflows. This definition is written for business users who need practical understanding that supports implementation, reporting, approvals, reconciliation, and policy decisions.
If you are reviewing related concepts, continue to the The Accountant's Dictionary, browse ERP articles on the Eprecus blog, or explore the Eprecus ERP platform overview.
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Gross margin
Gross margin shows how efficiently the business turns revenue into contribution before operating overhead is considered. It is one of the most important commercial-health indicators in product, distribution, retail, and project businesses.
Why it matters
Margin compression can signal pricing weakness, poor purchasing control, inventory valuation issues, or operational inefficiency. That makes gross margin a decision metric, not just an accounting line.
How teams use it
Finance, inventory, procurement, and sales leaders analyze gross margin by item, category, branch, customer, project, and channel to guide pricing and profitability decisions.
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