Create and maintain the tables used to calculate materials markup for invoicing.
In previous releases, materials markup always calculated as the cost plus markup without considering any lower cost levels. However, this could result in pricing inconsistencies. For example, suppose a $5 item is marked up 700%. The charge to the customer would be the cost of $5.00 plus a $35 mark-up or $40. But suppose that an item that costs $6.00 has a 400% mark-up. In this case, the price would be the cost of $6.00 plus a $24 mark-up resulting in a price of $30 (or $5.00 less than the cheaper item).
In Version 9.0, the default code used to calculate the price has been refined to take the previous level into account when doing the calculation resulting in a Under the new methodology, a $6.00 item would be marked up as follows:
First level (700% rate up to 5.00 level) $5.00 plus a $35 markup = $40.00
Second level (400% rate above 5.00 & up to 10.00 level): $1.00 plus a $4.00 markup =$5.00
Total graduated price: $40.00 (for the first level) + $5.00 (for the second level) = $45.00
Two new display-only columns, Unit Price Min and Unit Price Max have been added to the Material Rate Table. The following illustration compares the difference between the old and new (default) methods.
A Material Rate Table should be specified in each Rate Schedule. It will used for materials markup for all Jobs referencing this Rate Schedule unless the Use Unit Pricing flag is set in the Inventory Item record.
Foreign Currency Note:
Separate Material Rate tables must be created for your foreign currency customers if you wish to bill them in their own currency. If your inventory items are not ‘unit price’, these tables must specify the material markup such that your material costs (which are maintained in your local currency) are marked up to an appropriate foreign revenue. Note that this material markup will also be applied to miscellaneous materials.
If the default markup methodology is in effect the Billing Type Id field on the Work Order Inventory and Other Tabs (if the Other Item is material) will be set to Unit Price because the price calculation is the result of an aggregate calculation. If the old markup methodology is in effect (set via registry) this field will be set to the applicable value (margin, markup or multiplier).
Registry to Enable Old Markup Methodology
Material Rate Table Id:
A unique Id for this table. This field is required.
Material Rate Table Name:
This optional field briefly describes the table.
Material Rate Type: Markup - Margin - Multiplier
In previous releases, the Material Rate Table only supported Markups (cost plus markup). In Version 9.0, Material Rate Tables converted from version 8.2 (and before) will be assigned the Material Rate Type of Markup to support previous behavior.
The following types are also available:
Selecting Margin enables the user to set the desired profit margin ((Unit Price - Unit )/Unit Price) for this item in the Rate field (entered as a percentage). Validation ensures that the Rate must be less than 100 for tables with the Material Rate Type set to Margin. The following shows the Margin equivalent of the previous Markup table (using the new methodology). A graduated pricing structure will be in effect unless the 'old' methodology is enabled via registry.
If you select Multiplier, the system will multiply the Rate X Unit Cost to obtain the Unit Price. For example, a multiplier of 1.2 applied to a cost of $100 would yield a unit price of $120.
Note that both Margin and Multiplier are also 'smoothed' so that the Unit Price Max of the first line is forced to equal the Unit Price Min of the second line unless the sys-ffv-global-settings MaterialMarkupMethod option is set to old.
Obsolete?
If this field is checked, the record is considered Obsolete, and it may not be directly specified during data-entry (either by entering the Id or selecting it from a list). Obsoleted records can be edited and the Obsolete option can be un-done when necessary. When you check the Obsolete field, the following message box will be displayed:
“You have elected to obsolete this record. Would you like to see existing references to this record?”
If you click Yes, the system will display a viewer that provides click-through access to all tables referencing this record: see References List for details.
Security Id:
If multiple location security is implemented on your centralized database system, this informational field displays the Security Id of the local user that created this record. If multiple location security is not implemented on your system, or if this record was created by a global user, this field will be blank.
Level:
The highest cost level to which the markup applies.
Rate:
The Markup, Margin or Multiple (as defined in the Rate Type field).
Level: The dollar amount per unit up to which this rate applies.
Foreign Currency: Costs will be maintained in your local currency. The Rate must include the adjustment from the local cost to the foreign revenue.
UnitPrice Min: UnitPrint Max:
The following illustration shows the default smoothing methodology where the Unit Price Min on the second line is forced to the Unit Price Max from the previous line in the aggregated approach. This methodology is in effect if the registry setting to disable it is not in effect.
Under the OLD Methodology (now enabled via registry) notice that the Unit Price Max of the first line exceeds the Unit Price Min of the second line - leading to inconsistencies in pricing near the price break.
