PST and GPM Calculations in JobRunner and FloorManager

In our management systems, we display PST on cost as a separate group of costs in the job cost details views. At present we do not show the unit cost of PST per line.

The setting of GPM (gross profit margin) will automatically increase on the material line in a supply and install job to consider the PST.

For example, 1 unit of material costs $100.00, the PST rate is 7% and you want to set the sell price at a 10% GPM:

Creating the line initially would look like this:

The PST is still being considered as part of the anticipated costs. The system sees the total unit cost as $107.00 ($100.00 x 7% PST).

The GPM setting tool is used to set the sell price at 10% GPM:

The system makes this calculation based on the $107.00 cost for materials. This is to make sure that you are collecting the PST in the sell price.

The system calculates: $107.00 x 1.111 (this is the GPM multiplier for 10%GPM). This sets a sell price of $118.877 which is rounded to display 2 decimals places at $118.89.

See the GPM Multiplier Table here: Margin Multiplier Table for GPM

The GPM formula is then applied to the material part of the line after the setting of the sell price to display the GPM in the line. However, the system calculates this on the unit cost of $100.00 since PST is a pass-through cost:

$118.89 - $100.00 / $118.89 = 0.1589 (15.9% GPM)

Total Sales – Total Costs / Total Sales = Gross Profit Margin

See the GPM formula here: Gross Profit Margin Explained

This type of display is repeated in the More Details area of the profit tab.

The Material landed cost is displayed as $100.00 just like the line item at the line detail view since PST is a pass-through. This area still shows the increased GPM though just like the line detail. (Marker 1).

The Labor is unaffected by this of course because PST is not calculated on the cost of labor in supply and install jobs (Marker 2).

The PST is displayed as a separate cost area so that you can view the total PST on the job that is anticipated (marker 3).

In the overall job totals at the bottom, the system puts the numbers back together (marker 4). It sees the total anticipated cost of materials with PST ($107.00) and the cost of labor ($100.00) as $207.00. The system sees the total sales amount as $230.00 ($118.89 + $111.11). Then the system applies the GPM formula to this information (Marker 4).

The overall job does get set at %10 GPM. The system just makes sure that the PST cost is considered in order to reflect what will be paid later down the line.