Recording Non-Recoverable Costs in your Head Contract

You can track non-recoverable costs caused by overruns or re-work that you don't want to charge to your client in a Cost Plus job.

Introduction

Hide Non-recoverable line from Client

Introduction

When you are managing a Cost Plus project for a client you may need to account for costs incurred that you are not able to on-charge. This might include items that you must absorb costs for, such as re-work, replacement materials or cost overruns.

You can mark such spent costs as hidden from your client, so they are excluded from your claims and from the margin calculations when you create claims for this project.

When you export the Cost plus supporting documentation from your Claim, any costs from lines that are marked as Hide from Client are not exported.

Recommendation

The workflow recommendation to handle this situation is:

• Create a new Head Contract Trade Summary line or Head Contract Variation line and name it as, for example, Non-recoverable costs.
• Exclude the Trade Summary or Variation lines from the monthly payment claim that is submitted to the client each month by flagging them as Hide from Client.
• Code this non recoverable cost to a separate Cost code so you can track these costs in reporting.
• If you have more than one non-recoverable item, you can create separate Trade Summary or Variation lines, each with a new Cost Code, to allow you to see this level of detail by item breakdown.

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Hide Non-recoverable line from Client

To hide a line for non-recoverable costs from your client:

• Go to Payment Claims > Head Contract.
• Select the Head Contract.
• Go to the Contract tab or Variations tab.
• Click Add line.

In the Create Head Contract Trade Summary Line window, or Create Head Contract Variation window:

• Description: Add a Description with such as Non-recoverable costs for xyz.
• External notes: You can also add external notes, as the client will not see this line.
• Hide from client: Check this field.
• Click Save.

When you create your Claim, you can see any lines that have been marked as Hide from Client. They will have the field Hide from Customers checked. These Trade Summary and Variation lines will not be included in your claim and will not be included when you Generate Cost Plus Supporting Documents from the Claim screen.

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Last updated: 1 June 2023