Adding 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 and are 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.

Percentage or dollar amount changes to Default Invoice Markups can be made during the course of the project but will not affect existing Prime Invoices unless they are deleted from the transaction and then re-imported.

  1. At the Prime Contract listing, click on the Prime Contract # to view the details.
  2. Navigate to the Project Information Linked To Prime Contract" section.
  3. Click the View Default Markups - Cost Plus Prime Invoices link.
  4. Click the Add button.
  5. Enter the Order # and Description.
  6. Select the Markup Type (i.e. Percentage, Lumpsum, or Margin) and enter the Markup Amount ($100.00 = 100, 5% = 5). See example below for differences between Standard and Margin Markups.
  7. Select the Markup Resource.
    • Bills, Misc. Expenses, and Work Orders - Material Resource Lines Only
    • Labor Timecards, Bills, Misc. Expenses, and Work Orders - Labor Resource Lines Only
    • Equipment Timecards, Bills, Misc. Expenses, and Work Orders - Equipment Resource Lines Only
    • Sub Invoices, Bills, Misc. Expenses, and Work Orders - Subcontractor Resource Lines Only
    • Bills, Misc. Expenses, and Work Orders - Other Resource Lines Only
    • All - Every Line Item
  8. Check or Uncheck if previous Invoice Markups should be included in the calculation. Previous is determined by Order #.
  9. Select the Job Cost Code.
  10. Optional: Select the Tax Code.
  11. Click the Save or Save and New button.

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 %

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  

Calculating Multiple Margin Markups Using Subtotal versus Total

Since there can be multiple default cost plus invoice markups and different types (ex. lumpsum, standard, and margin) for a particular project, calculations must be done using the Item Subtotal and NOT Total especially when margin markups come into play. Below is an illustration how using Subtotal differs from Total when calculating margin markups.


Example Margin Markups:

  • Margin Markup 1: 15% | Include Previous = Unchecked
  • Margin Markup 2: 10% | Include Previous = Unchecked
  • Margin Markup 3: 05% | Include Previous = Unchecked

Margin Markup Formula Using 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 %


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