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.
- Go to Projects and select the appropriate project from the list..
- On the Project Home page, select Prime Contracts in the Client Contract Admin section.
- On the Prime Contracts page, select a contract number from the list.
- In the Project Information Linked To Prime Contract section, select View Default Markups - Cost Plus Prime Invoices.
- Select Add.
- Enter the Order Number and Description.
- Select the Markup Type, such as Percentage, Lumpsum, or Margin
- Select one or more of the following Markup Resources:
- M Resource Items: Bills, Misc. Expenses, WOs
- L Resource Items: Labor Timecards, Bills, Misc. Expenses, WOs
- E Resource Items: Equipment Timecards, Bills, Misc. Expenses, WOs
- S Resource Items: Sub Invoices, Bills, Misc. Expenses, WOs
- O Resource Items: Bills, Misc. Expenses, WOs
- 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.
- Select the Include Previous option if previous invoice markups must be included in the calculation.
Previous invoice markups are determined by order number.
- Select the Job Cost Code.
- Optionally, select the Tax Code.
- Select Save or Save & New.
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:
| Invoice item type | Invoice amount | % of total |
|---|---|---|
| Labor timecards | $2,000.00 | 13.740% |
| Equipment timecards | $500.00 | 3.435% |
| Miscellaneous expenses | $100.00 | 0.687% |
| Bills | $4,500.00 | 30.916% |
| Sub invoices | $6,000.00 | 41.221% |
| Subtotal | $13,100.00 | |
| 10% margin markup | $1,455.56 | 10.000% |
| Total | $14,555.56 |
| Invoice item type | Invoice amount | % of total |
|---|---|---|
| Labor timecards | $2,000.00 | 13.879% |
| Equipment timecards | $500.00 | 3.470% |
| Miscellaneous expenses | $100.00 | 0.694% |
| Bills | $4,500.00 | 31.228% |
| Sub invoices | $6,000.00 | 41.638% |
| Subtotal | $13,100.00 | |
| 10% standard markup | $1,310.00 | 9.091% |
| Total | $14,410.00 |
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:
| Invoice item type | Invoice amount | % of total |
|---|---|---|
| Labor timecards | $2,000.00 | 11.392% |
| Equipment timecards | $500.00 | 2.848% |
| Misc. expenses | $100.00 | 0.570% |
| Bills | $4,500.00 | 25.631% |
| Sub invoices | $6,000.00 | 34.175% |
| Subtotal | $13,100.00 | |
| Margin markup 1: 15% | $2,311.76 | 13.167% |
| Margin markup 2: 10% | $1,455.56 | 8.291% |
| Margin markup 3: 5% | $689.47 | 3.927% |
| Total | $17,556.79 |
| Invoice item type | Invoice amount | % of total |
|---|---|---|
| Labor timecards | $2,000.00 | 10.687% |
| Equipment timecards | $500.00 | 2.672% |
| Misc. expenses | $100.00 | 0.534% |
| Bills | $4,500.00 | 24.046% |
| Sub invoices | $6,000.00 | 32.061% |
| Subtotal | $13,100.00 | |
| Margin markup 1: 15% | $2,807.14 | 15.000% |
| Margin markup 2: 10% | $1,871.43 | 10.000% |
| Margin markup 3: 5% | $935.71 | 5.000% |
| Total | $18,714.29 |