About equipment cost recovery

Note: This functionality is available only if you have the Equipment Module.

You can remove the guesswork associated with recovering equipment costs. On the Cost Recovery/Rental Rates tab of 8-3 Equipment, you can provide the cost to own and operate the equipment for a resource consumption period as well as the estimated use for the resource consumption period. You can then compute an estimated per-unit rate to recover costs.

Through the cost recovery rate, you post the costs for owning and operating equipment to the job. The accounting transaction posts a debit to the Job Expenses account in the Direct Expense range, and a credit to the Equipment Revenue controlling account in the Equipment/Shop Expense range. The transaction increases direct expenses and reduces overhead expenses, resulting in a more realistic view of job profits. At the same time, Sage 100 Contractor creates a job cost record and an equipment revenue record.

To determine the cost recovery rate, project the use and costs that you can expect based on records from previous years. Do not include the cost of labor in the operational costs because job costs created in Sage 100 Contractor include the equipment operator’s time. It is a good idea to review the cost recovery rate every year and make adjustments. If you discover that the equipment use is considerably higher or lower than expected, evaluate the cost recovery rates sooner.