Percentage Markup

SingleOps provides users with an easier way to markup Items and services when creating proposals. 

In this article:

Terms & Descriptions

Cost Plus / Percentage Markup

Using Cost Plus or Percentage Markup in SingleOps

Modifying Markup on a Job-by-Job Basis

 

Terms & Descriptions

Term Description Example
Cost Cost is what you, as a business, pay for a product or service. You paid $10 to purchase mulch from your wholesaler - the $10 is your cost
Price Price is the amount your customer is willing to pay for a product or service. You charge $15 to your customer for the mulch
Markup

Markup represents the percentage added to the cost of goods sold (COGS) to arrive at the sale price. It is the ratio of profit to the cost price.

For example, if the cost of the product is $80 and the profit is $20, the markup is 25%.
Margin Margin refers to the percentage of the final sale price that is profit. It is calculated by dividing the profit by the total sale price. For example, if you sell a product for $100 and the profit is $20, the margin is 20%.

 

Cost Plus or a Percentage Markup

Cost Plus If selecting Cost Plus, it is a Markup model. You paid $10 to purchase mulch - that was your cost. You want to add a $5 markup to that mulch to cover your overhead. That is Cost plus Markup which brings you to your price.
Percentage If selecting Percentage, it is a Margin % model. Paying $10 to purchase mulch and wanting to maintain a 50% markup. The SingleOps system multiplies your cost ($10) by the percent markup (50%) which would bring your price to $15. 

 

Using Cost Plus or Percentage Markup in SingleOps

When creating a proposal or an active Job, you can select which markup method you prefer by scrolling down to the Additional Options section. By choosing either: Cost Plus or Percentage, the Items table above will automatically refresh to reflect your selected markup method.

IMPORTANT:  Once you’ve selected Percentage as your markup method, the number in the Margin column on the Estimate table (like in image below) represents the percentage of the total unit price which is made up of the margin

Example

Below, the total unit price for the line item 'Take Down and Remove' is $170.00.  
The actual cost of the item is $50.00 - which is 29.41% of the total price. 
The margin is then $120.00 - which is 70.59% of the total price.

image_2_Markup_as_a_Percentage_-_03_-_20180116.JPG

Another way to think about this is:
Total Cost = Unit Cost / (1 - Margin Percentage)
Unit Cost = $10
Margin Percentage = 50% (or 0.50)
So using the formula:
Total Cost = $10 / (1 - 0.50)
= $10 / 0.50
= $20

Be sure and enter in the margin dialog the percentage of the total unit price you wish to realize as margin (profit).

 

Modifying Markup on a Job-by-Job Basis

You can modify this markup option on a job-by-job basis but if you find yourself constantly doing this, you can set percentage to be the default method of calculation by modifying an account setting. 

  1. Navigate to: mceclip0.png Setup > Account Settings > Company
  2. Check the box next to Use Percentage Pricing
  3. Click the Update Account button at the bottom to preserve your change

 

 

 

 

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