Add default cost plus prime invoice markups

Default invoice markups, such as overhead and fee, are separate line items added to a cost plus prime invoice. They're typically a percentage of expenses and timecards that have been imported into the transaction.

Default invoice markups are established in the prime contract usually at the beginning of the project, and are then imported into future prime invoices.

You can make percentage or dollar amount changes to the default invoice markups during a project, but they will not affect existing prime invoices. However, they can be deleted from the transaction and then re-imported.

1. Go to Projects and select the project in the Quick Select section.
2. On the Project Home page, select Prime Contracts under the Client Contract Admin section.
3. Select the Prime Contract # to view the details.
4. In the Project Information Linked To Prime Contract section, select the View Default Markups - Cost Plus Prime Invoices link.
5. Select Add.
6. Enter the Order Number and Description.
7. Select the Markup Type, such as Percentage, Lumpsum, or Margin
8. Select one of the following options in the Markup Resource dropdown:
   • Bills, Misc. Expenses & WO - M Resource Lines Only
   • Lbr. Timecards, Bills, Misc. Expenses & WO - L Resource Lines Only
   • Eqp. Timecards, Bills, Misc. Expenses & WO - E Resource Lines Only
   • Sub Invoices, Bills, Misc. Expenses & WO - S Resource Lines Only
   • Bills, Misc. Expenses & WO - O Resource Lines Only
   • All - Every Line Item
9. Depending on the markup type selected above, enter the Markup %, Markup Amount, or Margin %.

   For example, enter 100 if the amount is $100.00, and enter 5 if the percentage is 5%. See the examples in the table below for differences between standard and margin markups.

10. Select the Include Previous option if previous invoice markups must be included in the calculation.

    Previous invoice markups are determined by order number.

11. Select the Job Cost Code.
12. Optionally, select the Tax Code.
13. Select Save or Save & New.

Differences between standard and margin markups

Margin markup amount = (expenses and timecards invoice subtotal / (1 - margin markup %)) - expenses and timecards invoice subtotal

Standard markup amount = expenses and timecards invoice subtotal * standard markup %

For example:

Margin markup example				Standard markup example
Invoice item type	Invoice amount	% of total		Invoice item type	Invoice amount	% of total
Labor timecards	$2,000.00	13.740%		Labor timecards	$2,000.00	13.879%
Equipment timecards	$500.00	3.435%		Equipment timecards	$500.00	3.470%
Misc. expenses	$100.00	0.687%		Misc. expenses	$100.00	0.694%
Bills	$4,500.00	30.916%		Bills	$4,500.00	31.228%
Sub invoices	$6,000.00	41.221%		Sub invoices	$6,000.00	41.638%
Subtotal	$13,100.00			Subtotal	$13,100.00
10% margin markup	$1,455.56	10.000%		10% standard markup	$1,310.00	9.091%
Total	$14,555.56			Total	$14,410.00

Calculate multiple margin markups using subtotal versus total

There can be multiple default cost plus invoice markups and different types, such as lumpsum, standard, and margin, for a particular project, so calculations must be done using the item subtotal and not the total, especially when considering margin markups. Below is an illustration of how using the subtotal differs from using the total when calculating margin markups.

Examples of margin markups:

• Margin markup 1: 15% and Include Previous option deselected.
• Margin markup 2: 10% and Include Previous option deselected.
• Margin markup 3: 5% and Include Previous option deselected.

Margin markup formula using the subtotal (Sage Construction Management Method):

• Margin markup 1 amount = (expenses and timecards invoice subtotal / (1 - margin markup 1 %)) - expenses and timecards invoice subtotal

• Margin markup 2 amount = (expenses and timecards invoice subtotal / (1 - margin markup 2 %)) - expenses and timecards invoice subtotal

• Margin markup 3 amount = (expenses and timecards invoice subtotal / (1 - margin markup 3 %)) - expenses and timecards invoice subtotal

Margin markup formulas using total:

• Total = expenses and timecards invoice subtotal / (1 - (margin markup 1 + margin markup 2 + margin markup 3))

• Margin markup 1 amount = total * margin markup 1 %

• Margin markup 2 amount = total * margin markup 2 %

• Margin markup 3 amount = total * margin markup 3 %

For example:

Margin markup example using subtotal				Standard markup example using total
Invoice item type	Invoice amount	% of total		Invoice item type	Invoice amount	% of total
Labor timecards	$2,000.00	11.392%		Labor timecards	$2,000.00	10.687%
Equipment timecards	$500.00	2.848%		Equipment timecards	$500.00	2.672%
Misc. expenses	$100.00	0.570%		Misc. expenses	$100.00	0.534%
Bills	$4,500.00	25.631%		Bills	$4,500.00	24.046%
Sub invoices	$6,000.00	34.175%		Sub invoices	$6,000.00	32.061%
Subtotal	$13,100.00			Subtotal	$13,100.00
Margin markup 1: 15%	$2,311.76	13.167%		Margin markup 1: 15%	$2,807.14	15.000%
Margin markup 2: 10%	$1,455.56	8.291%		Margin markup 2: 10%	$1,871.43	10.000%
Margin markup 3: 5%	$689.47	3.927%		Margin markup 3: 5%	$935.71	5.000%
Total	$17,556.79			Total	$18,714.29