Watch this video for an overview of the overhead recovery screen, including an explanation of how each overhead recovery method works.
In this video you'll learn:
- What Single Overhead Recovery system (SORS) is and how it works
- What the Field Labor Hour Overhead Recovery system (FLH) is and how it works
- What the Multiple Overhead Recovery system is (MORS) and how it works
- How you can customize your overhead recovery methods to use other systems (e.g. double overhead recovery (DORS))
Selecting your Overhead Recovery Method
The Overhead Recovery tab of your budget will provide you with three options for overhead recovery. Overhead recovery will ensure that you are recovering all costs for running your business within the jobs you bid. On the Overhead Recovery tab you will select the recovery method for your budget. Please note that this can be over-ridden within an estimate if required. Please see an explanation of each Overhead Recovery option below. If you would like to read more about your Overhead Recovery options, please click HERE.
Multiple Overhead Recovery (Recommended)
- Multiple Overhead Recovery will apply a markup to each of your COGS (Labor, Equipment, Material and Subs).
- You will be able to adjust your Equipment Markup, Material Markup or Subs Markup. Your Labor Markup will be calculated for you based on the numbers you add to the other three fields. For more information on how the Labor Markup is calculated, please click HERE.
- The highest markup percentage should be allocated to Labor, as this is the hardest element to manage within a company.
Field Labor Hour Overhead Recovery
- Field Labor Hour Overhead Recovery will recover all of your overhead costs within your Labor rates only, by applying a dollar amount to each Man Hour estimated.
- This markup will be calculated by taking your Forecast Overhead Costs and dividing by your Forecast Labor Hours.
Single Overhead Recovery
- Single Overhead Recovery will recover all of your overhead costs by applying a percentage to all labor, equipment, materials and subs estimated.
- This markup will be calculated by taking your Forecast Overhead Costs and dividing by your Forecast COGS (Field Labor, Equipment, Material and Subs).