Use Allowances for any project work that doesn't have clear specifications. That way you can start with a firm price, and then adjust it later, when you have more details.
HINT-- The Goldenseal project estimating software uses the allowances as a "fixed price" amount in the estimate. You can then use allowance billing to charge for actual costs, after work starts on the project.
When to Use Allowances
Allowances let you create fixed price estimates, even when you don't know the cost of some items.
For example, use an allowance when a construction project includes kitchen appliances, but doesn't specify the brand or model number. The project price is based on the allowance amount. Billing for allowances is based on actual costs.
HINT-- In other words, you can use an allowance as a small bit of time and materials pricing within a fixed price estimate.
You can also use allowances to combine several unit costs into a simple package that you can use multiple times in an estimate. In that case, turn on the Cost per Unit checkbox, so you can enter a quantity in the estimate.
HINT-- In other words, you can use an allowance just like a temporary Assembly within an estimate.
To enter an Allowance into Goldenseal construction estimating software, follow these steps:
SETUP HINT-- You only need to enter a Brief Description and Gross Price.
Enter the following information for each Allowance:
Brief Description-- Enter a short description of the allowance. This text will appear in estimates that include this allowance.
Date Entered-- Today's date is entered automatically.
NOTE-- You can't assign an allowance directly to a project. It always needs to be part of an Estimate.
To make a detailed breakdown of items included in an allowance, click on the breakdown popup field and enter Category or Items.
Click the More Info button to enter the following details about an estimating allowance:
Billing-- Choose the type of billing to use for this allowance.
HINT-- Goldenseal uses the Labor Hours and Crew Size fields to set up the schedule timing for this item, when it is included in an Estimate.
Goldenseal also shows you the expenses to date for this allowance.
HINT-- When you enter expenses for an allowance, you'll put the allowance into the Applies To field in the expense transaction.
Goldenseal displays two calculated fields for each Allowance record:
Material Costs to Date-- The total of all Material Purchases that have been assigned
to this allowance.
When you first create an allowance, its status is listed as Entered.
Allowance Billing Types
Allowances are like a piece of "time and materials" work. They can be billed in several ways:
All Costs-- The actual price for the item will include all equipment, labor, material, subcontractor and other costs.
To use an Allowance, follow these basic steps:
Including in EstimatesTo include allowances in an Estimate, follow these steps:
Awarding an EstimateTo award an estimate to a Project account, create a new Project account and enter the estimate into the Estimate field.
Assigning Costs to an AllowanceTo enter costs for an allowance, follow these steps:
Goldenseal 'posts' the expense to the allowance-- you can see totals in the calculated fields labeled Materials to Date and Other Costs to date.
NOTE-- Those fields show the expense amount, without including adjustments or sales tax. Goldenseal posts the sales tax separately so it can be used for billing. If you'd like to see it, use the Custom Layout command and add the Sales Tax To Date field to the layout.
Allowance BillingThe estimate will include the allowance price. You'll bill for the basic allowance amount as part of the main project, using either draw schedule, progress payment or time and materials billing.
When an Allowance item has been completed, use Allowance billing to bill for the difference between the original budget amount and the actual costs for the item. To do that, choose Billing from the Bank menu, and choose Allowances from the submenu.
NOTE-- If you use time and materials billing for the main project, you don't need to bill separately for the allowances, since their cost is already included in the regular project costs.
When you use an allowance on a project that uses draw schedule or progress payment billing, Goldenseal only bills for the difference between the total cost of the allowance and the estimate cost, since the original allowance cost is included in the basic billing for the main project.
Working With Allowance Records