Inventory Pricing Alternatives

Invoicing and Billing Rate Types The Billing Type (specified in the Labor Rate, Labor Rate Table, Other Rate, Other Rate Table, and Materials Rate Table) determines how the revenue rate will be applied during invoicing. The following are valid options: Unit Price multiplies the units billed times the rate. Important Note On Materials: The Unit Price may either be pulled from the Inventory Item’s Unit Price Level, or may be calculated by system based on the graduated pricing structure in the Material Rate Table. In this case, the Unit Price is refined to take the previous level into account when doing the calculation. The following Types of Markup, Margin and Multiplier only default in if the old materials markup methodology (which did not support aggregate pricing) is enabled via registry. This document assumes the new methodology is in effect. If Markup Added to Cost is selected the rate defines the markup that is added to the cost. For example, a 100% markup applied to an item costing $100 would generate a unit price of $200. A 30% markup applied to an item costing $100 would generate a unit price of $130. Margin enables the user to set the desired profit margin ((Unit Price - Unit Cost)/Unit Price) for this item in the Revenue Rate field. If you select Multiplier, the system will multiply the figure in Revenue Rate X Unit Cost to obtain the Unit Price. For example, a multiplier of 1.2 applied to labor costing $100 would yield a unit price of $120. Selecting n/a forces the user to enter the revenue amount directly.

Inventory Item Specifying Price Levels If the Use Price Levels flag on the Pricing/Costing tab is checked, the Unit Price will be pulled from the Unit Prices on this tab instead of being run through the Material Markup table. The Price Level is specific in the Job and the Client Site records. Special Pricing allows a Price Code allows the Unit Prices (above) to be overridden if the Price Code in the Inventory Item (ABC) matches the Price Code in the Site. The Price Level specified in

Price Code Record Provides the capability to override/customize pricing levels by client site for selected inventory items. If implemented, a Price Code would be reference in the Client Site and the Inventory Record PRC Tab. Example: Suppose you want most clients to use the standard 9 price levels on the main inventory item screen for item xyz, but that you have a special agreement with other clients for a different price level schedule. To handle this situation, you would first create a Price Code, and then enter it in the Price Code field of all Sites that are entitled to this pricing structure. Next, edit the Inventory Item Pricing tab of all records subject to this special pricing. These special prices will default on Client Orders for Client Sites with this Price Code. Regular price levels will be used for items without appropriate Pricing tab entries.

Material Rate Table – Markup Type The Material Rate Type can be specified as Markup (plus cost), Margin or Multiplier. Not used for Inventory Items if Use Price Level / Pricing Codes are in effect. Referenced in the Rate Schedule In this example, an item costing $22 would be marked up as follows: First level (300% rate up to 10.00 level): $10.00 plus a $30 markup = $40.00 Second level (200% rate above 10.00 & up to 100.00 level): $12.00 plus a $24.00 markup =$36.00 Total graduated price: $40.00 (for the first level) + $36.00 (for the second level) = $76.00 (total graduated price) Cost of Materials or Inventory Item (<= level) Mark-up Percentage Shows the Minimum/ Maximum prices for costs in the selected level.

Material Rate Table – Margin Type If the Type of Margin is selected, the desired profit margin ((Unit Price – Unit Cost )/Unit Price) is entered in the Rate field as a percentage.   Validation ensures that the Rate must be less than 100 for tables with the Material Rate Type set to Margin. In this example, an item costing $22 would be marked up as follows: First level (50% margin up to 10.00 level): $20.00 Second level (45% margin on $12 of cost above 10.00 level) $21.82 Total graduated price: $20.00 (for the first level) + $21.82 (for the second level) = $41.82 (total graduated price) Cost of Materials or Inventory Item (<= level) Margin Percentage Shows the Minimum/ Maximum prices for costs in the selected level.

Material Rate Table – Multiplier Type If you select Multiplier, the system will multiply the Rate X Unit Cost to obtain the Unit Price. In this example, an item costing $22 would be marked up as follows: First level (multiply costs by 2.5 up to the 10.00 level): $25.00 Second level (multiple 2.0 on $12 of cost above 10.00 level) $24.00 Total graduated price: $25.00 (for the first level) + $24.00 (for the second level) = $49.00 (total graduated price) Cost of Materials or Inventory Item (<= level) Multiplication Factor Shows the Minimum/ Maximum prices for costs in the selected level.

Rate Schedule Specifies the date ranges applicable to your Labor, Material and Other Rate tables. Effective date of transaction determines which line of Rate Schedule will be used. Referenced in the Job and Quotation Records. Multiple tables may also be made to accommodate standard, preferred, etc.

Revenue Adjustment – Inventory Exceptions Tab Overrides the default Material (or Total) discount for Inventory Items belonging to the specified Inventory Groups. Inv Grp Id: Inventory Items entered belonging to this Group will be discounted according to the Discount % on this line. The discount amount will be debited to the Material GL Account Id: located in the upper section of this viewer. Invoice Description: the description this type of discount. Discount % The discount percentage to apply to this Inventory Item Group. If blank, no discount will be taken. In this example, the Refrigerant Discount will be set to 3.0% instead of the default 10.0%, while sheet metal materials will not be discounted at all.