Using an Internal Expense as an Admin Fee

Let's say, we need to put a 5% fee on our job to cover our Disbursement Costs - copies, toner, local phone bills and the like. The client does not need to approve this fee at the Estimate level, but it does need to appear on the Invoices from the Job level. How do we handle this?

If you need to add or subtract a percentage amount from your Estimates and Jobs, you can do so in a couple of ways. One way is to use an External Expense as an Admin Fee, the other is the use an Internal Expense in a similar fashion.

The bonus of going the Internal Expense route, is that the percentage amount can be more easily applied to all the Service Groups and Services within an Estimate/ Job. Whereas the External Expense as an Admin Fee route will only apply to the Service Group level that it is a part of.

Please review this article for directions on setting up an Internal Expense as an Admin Fee in your fp. system.

Set Up

Set Up

We need to begin by getting this fee added into the system as an Internal Expense.

Navigate to Admin > Service and Expense Management > Internal Expenses ($/ Unit Sold).

From the resulting list of current internal expenses in your system, choose the button called Add Expense.

On the Create New Internal Expense form, required fields are marked in blue:

  1. Give this new expense a name. The system will auto generate an Expense Code - change this code as you see fit.
  2. Mark the Status as Active.
  3. Leave the Cost field blank, as that will be set up in a subsequent step.

Click Create Expense when ready.

The new Internal Expense has now been created, but it will need to be included in one of your active Service Groups in order to be available to add to Estimates and Jobs.

From Admin menu, choose Service and Expense Management > Service Groups.

Click on the Service Group you want this Internal Expense to be a part of. For this example, I'm picking my group called Inside Costs.

You'll land on the Basic Info tab. From here, pick the Service List tab.

Click New Services.

And from the subsequent pop-up menu, tick the box beside the Internal Expense we just created - Disbursement Costs. Click the Add Services & Expenses button (bottom right) when ready.

The Disbursement Costs item is now organized within a Service Group.

Set the Rate for the Fee

From the Admin menu, choose Rate and Staff Management > Service Rates and Markups.

You will land on your Company Bill Out Rates page. You may have one, or several rates here, depending on your set up. Across the rates, for the row showing our Disbursement Costs Internal Expense, enter 0.05 (for 5%), 0.07 (for 7%) etc.

In my system, I'm entering 0.07 against my Rush Rate, and 0.05 for my Standard Rate. Click Save in the bottom right when ready.

Using the Internal Expense as an Admin Fee in Action

When creating a new Estimate, the Disbursement Cost is selectable.

Fill in the hours and costs and quantities for everything in the Estimate apart from the Disbursement Cost line. You will end up with a grand total at the bottom of the Estimate.

Now take that total, and copy it into the Qty field for the Disbursement Costs row.

When you tab out of that Qty field, the calculation of the total, times 0.05 will occur. In fact calculating 5% of the total, for the line value as seen above. This line value adds into the new overall total.

If and when this Estim/ate becomes a Job, we will also be able to see this line on the Job level Financials.

And when we go to Invoice this work, this line will show on the Invoice as well - should we choose to display this level of detail on the Invoice printout.

Using the system in this way can enable you to add or even subtract percentage values from the work you do.

We hope you found this article helpful, and we welcome your questions or concerns about this process, and how it could be applied to your work: support@functionpoint.com

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