Contract Profit & Loss
The Contract Profit & Loss tab shows various financial summaries and is where the Contract Overhead is set.
Contract Overhead
Overhead is money taken off this contract to cover the cost of running the business. It is a payout to the company itself rather than to a person, and on this tab it is the line between Gross Profit and Net Profit — you can see it deducted in all three summaries further down the page.
Getting it right matters beyond this one contract. Any commission calculated as a percentage of net profit is worked out after overhead comes off, so the overhead set here decides what those commissions pay. See Contract Commissions & Payouts.
Automatic, or one specific rule
The dropdown decides how this contract's overhead is worked out. Choose an option and click Save.
- Automatic Overhead — the usual choice. Every active Company Overhead rule for the company is tested against this contract, and each rule that matches is applied. Where more than one matches, the amounts are added together. Recalculating tests them all again, so the overhead keeps pace with the contract as invoice items, expenses and work orders change.
- A named rule, listed under Active Overheads or Inactive Overheads — pins this contract to that one rule and ignores every other rule. A pinned rule keeps applying even if it has been archived, and that is what makes it useful: it holds a contract to the terms it was actually sold under, after the company's rules have moved on.
If the company has no Company Overhead rules at all, a short message appears in place of the dropdown, because Automatic has nothing to find. Rules are created under Company Settings › Payouts — see Payout Rule Overview.
Reading the overhead table
The table under the dropdown shows which rules produced the amount currently applied.
- One or more named rows — the rules that were applied and what each one contributed. The contract's overhead is their total, so two rows means two rules both applied and the contract carries the sum.
- No Overhead Assigned — no overhead is applied to this contract.
- Overhead applied — itemization not retained — an overhead amount is applied, but the rule-by-rule breakdown is not stored for this contract. The amount is still the figure used in the summaries below and in reports; only the breakdown is missing. Recalculating rebuilds it, but be aware that recalculating also works the amount out afresh from the rules as they stand today, which may not be what was applied originally.
When the overhead recalculates
The overhead is a record of what was applied to this contract, so it does not change just because you opened this tab. It is recalculated when:
- you change the selection above and click Save; or
- you choose Recalculate Payouts & Overhead from the action menu at the top right of the tab.
This is deliberate. A figure that was agreed months ago should not quietly change because somebody opened the page to look at it. If the contract has moved on and the overhead looks out of date, recalculate it.
Why a rule might not have applied
Under Automatic, a Company Overhead rule only applies to a contract that meets its conditions. The ones that most often explain a missing or unexpected overhead:
- Dates — the contract date has to fall between the rule's start and end dates.
- Assigned users — if the project has a sales rep, only rules that rep is assigned to are considered. A rule with no users assigned to it will not be picked up automatically on a project that has a rep.
- Trades — a rule limited to particular trades is matched against the trades of the work orders on the contract. A new contract has no work orders yet, so a trade-limited rule will not apply until one is added.
- Lead source, workflow and appointment conditions — each one set on the rule has to be satisfied by the project.
- Method — the rule's calculation method has to be one that produces an overhead amount.
See Payout Rule Overview for the full list of conditions and how to set them.
Who can change it
The dropdown and the Save button appear only for users with Has executive authority or Can create and approve payouts. Everyone else who can see this tab still sees the overhead amount and the table, but cannot change the selection.
See Company Payouts.
Various Summaries
Cash Basis
Cash basis accounting records revenue and expenses when cash related to those transactions actually is received or dispensed.
Accrual Basis
Accrual accounting records revenue and expenses when transactions occur but before money is received or dispensed.
Forecast
Things like expenses and payouts are estimated. But as the project progresses, these estimates become real values.
