OASIS provides two ways to calculate overage on a quote and has several rules to protect overage values as much as possible. This article will explain:
- How to use the Overage code (overage line)
- How to calculate overage per fixture line
- Users will need to add columns to their quote. If enabled, the Disable preferences for all users except user with "OASIS Admin" access General Global Setting will prevent most users from setting up column preferences.
Using the Overage Code
A quick and basic method for adding overage to a job is by entering the Overage code into the Code column and the total amount of overage for the quote into the Sell Price column. This is known as an overage line.
Overage lines do not require a manufacturer during the quotation process. This allows quoters to lock the job at a given price and identify the best manufacturer(s) for the overage later when the quote is ready to be converted to an order.
Overage lines are never shown on customer facing documents. Additionally, OASIS will hide unit and extended prices to ensure the customer can't calculate the amount of overage manually.
To print unit or extended prices, users will need to calculate overage per fixture line as described in the Calculating Overage per Fixture Line section of this article.
To convert the quote to an order, the overage line must be assigned to a manufacturer and the overage split must be entered into the %Overage column to determine the agency's overage earnings.
However, suppose a manufacturer's policy prohibits overage lines on an order. In that case, the quoter will need to delete the overage line and calculate overage amounts per fixture line before converting the quote to an order. Read the next section of this article, Calculating Overage per Fixture Line, to learn more about calculating overage per fixture line.
Calculating Overage per Fixture Line
Calculating overage per fixture line provides quoters complete control over profit maximization by allowing the user to adjust overage values strategically based on which manufacturer offers the highest overage split. Furthermore, it enables users to print the unit and extended prices because overage is included in the price of the fixture line and therefore hidden to protect agency earnings.
Overage Columns & Calculations
The following columns are required to calculate overage per fixture line:
- OBase- the price at which the manufacturer begins paying overage
- OBase Comm- the percentage of commission the manufacturer pays on the OBase price
- %Overage- the agency's percentage take of the overage (overage split)
Overage will calculate automatically when any price level for a part (Sell Price, Level 1, Level 2, or Level 3) exceeds its OBase price. OASIS will then use the OBase Comm percentage and the %Overage column to determine the agency's total earnings on the part.
Automating Overage Columns
Each column required for calculating overage per fixture line can be automated to make the quoting process more efficient.
- OBase and OBase Comm can be automated by assigning the Overageable kind to a price level on the Level Names tab of a manufacturer's price list. The price level must have a commission rate.
- %Overage can be automated by entering the overage split percentage into the Overage Split field on the Commissions/Invoicing tab of a manufacturer entry.
Examples of Calculating Overage per Fixture Line
Each example will use a quote with one fixture line and price level (Sell Price) to represent discussed calculations in the quote's header.
Example 1: No overage (Sell Price is below OBase)
In this example, no overage is earned for part A-12 because the Sell Price does not exceed OBase.
Example 2: No overage (Sell Price is equal to OBase)
In this example, no overage is earned for part A-12 because the Sell Price is equal to OBase.
Example 3: Overage is automatically calculated
In this example, part A-12 is calculating $20.00 in overage because the Sell Price exceeds OBase by $20.00 ($90.00 Sell Price - $70.00 OBase = $20.00 in overage).
Since the agency's take is 75% of the overage (%Overage column), the agency will earn $15.00 of the $20.00 in overage for part A-12 (75% overage split x $20.00 in overage = $15.00 in earnings).
The Over column in the quote header will track the quote's total overage earnings across each price level in the quote.
Once overage is calculated on a fixture line, OASIS will begin using the OBase Comm percentage to calculate the percentage of commission earnings (based on OBase) rather than the price level's commission percentage (based on the price level).
For part A-12, the agency has earned $7.00 in commission (10% OBase Comm x $70.00 OBase = $7.00 in commission earnings).
The Comm column in the quote's header will track the total amount of commission earned across each price level in the quote.
This brings the total earnings on part A-12 to $22.00 ($15.00 in overage earnings + $7.00 in commission earnings = $22.00 total earnings).
The Earn column in the quote header will calculate the quote's total earnings across each price level.
Additionally, once overage is earned on a part, all price level commission cells will appear gray and display the part's total rate of return inside curly brackets.
In this example, part A-12's total rate of return is 24.44% ($22.00 in earnings / $90.00 Sell Price) = 24.44% rate of return, as represented in the Sell Comm column.
The Rate column in the quote's header will track the total rate of return across each price level in the quote.