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# Cost type 'Indirect costs' becomes 'Other'

In the line detail of a post you choose a **cost type** for each line: Material, Labor, Equipment, Subcontractor or Composite. Until now there was also the cost type **'Indirect costs'**. That type disappears and is replaced by **'Other'**. Below you can read why, what changes in your figures and what definitely does not change.

||| **Your selling prices do not change.** An existing quotation is only converted if both the total excluding VAT and the price of every post stay exactly the same. What does change are the figures *behind* the selling price: cost price, margin and indirect costs.

## Why this change?

**Indirect costs** are a budget you set aside to pay for your general operations (office, investments, ...). In Robaws you provide that budget as a **percentage on your costs**, per cost type, via the **indirect cost margin** in the 'margins' tab of a calculated quotation. That stays the same.

On a post you could also add a line with cost type 'Indirect costs' to the line detail. In practice that type was mostly used as an extra kind of cost (transport, insurance, renting a container, ...) on which a margin was also taken. Robaws counted the full amount of such a line, **including the margin on it**, as an indirect cost. Your selling price was correct, but your overview was not:

- the **margin** of the quotation was lower than what you really earn,
- the **total indirect costs** were higher than the percentage you had set,
- in the **recalculation** that cost was budgeted as an indirect cost, while its purchase invoice comes in as an ordinary cost. Budget and reality could not be compared.

The cost type **'Other'** behaves like Material, Labor, Equipment and Subcontractor: the cost price counts as cost price, the margin on the line counts as profit margin.

## What changes in your figures?

In the **'overview'** tab of the quotation:

| Figure | Before | Now |
| --- | --- | --- |
| Total costprice | cost price of your lines + indirect costs, where the amount of 'Indirect costs' lines (including margin) counted as an indirect cost | cost price of your lines (including the cost price of 'Other' lines) + indirect costs from the indirect cost margin |
| Total indirect costs | indirect cost margin + the full amount of 'Indirect costs' lines | only the indirect cost margin |
| Margin | margin on Material, Labor, Equipment and Subcontractor | the same, plus the margin on 'Other' lines |
| Total | unchanged | unchanged |

The chart per cost type gets an extra slice **'Cost other'**.

In the **'Financial'** block of the project: the budgeted **indirect costs** go down and the **net result** goes up by the same amount. Costs, income and gross result stay the same.

In the **projects overview** the financial columns shift along: 'Estimated costs', 'Budgeted margin', 'Forecast margin', 'Forecast result' and 'Indirect costs budgeted / forecast'.

## An example

A quotation with:

- £1,000 material cost price,
- an indirect cost margin of 20% on material (£200),
- an 'Indirect costs' line of £100 in the line detail (for example transport),
- 50% margin on all lines, so also on that line.

In both cases the selling price is **£1,850**.

| | Before | Now |
| --- | --- | --- |
| Total costprice | £1,350 | £1,300 |
| Total indirect costs | £350 | £200 |
| Margin | £500 | £550 |
| Total | £1,850 | £1,850 |

The £50 margin on the transport line used to be counted as an indirect cost; now it is profit margin.

**Overview of the quotation, before:**

![Overview of the quotation before: total costprice £1,350, total indirect costs £350, margin £500](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-1_14y85uj.png =800x297)

**Overview of the quotation, now:**

![Overview of the quotation now: total costprice £1,300, total indirect costs £200, margin £550, with the slice Cost other](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-2_18frews.png =800x297)

**Financial overview of the project, before and now:**

![Financial overview of the project before: indirect costs £350, net result £400](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-3_jewqn9.png =455x204)

![Financial overview of the project now: indirect costs £200, net result £550](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-4_p8vvkb.png =455x204)

**Financial columns in the projects overview, before and now:**

![Projects overview before: estimated costs 1,350.00, budgeted margin 27.03%, indirect costs budgeted 350.00](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-5_1gnb2bh.png =800x127)

![Projects overview now: estimated costs 1,300.00, budgeted margin 29.73%, indirect costs budgeted 200.00](https://storage.crisp.chat/users/helpdesk/website/-/e/a/d/f/eadf6dec760ec000/indirecte-kosten-overige-en-6_1uaq5j0.png =800x127)

## What happens to your existing data?

The conversion happens automatically:

- **Quotations:** every line in the line detail with type 'Indirect costs' becomes 'Other' and the totals of the quotation are recalculated. This only happens if both the total excluding VAT and the price of every post stay exactly the same. You can find the conversion in the history of the quotation.
- **Quotations whose direct costs are shared 'based on the price'** are not converted. With that setting Robaws spreads your direct costs across the posts in proportion to their price. 'Other' lines count towards that price and 'Indirect costs' lines do not, so the prices of your posts would shift relative to each other: the total of the quotation stays the same, but the price per post does not. On a quotation you have already sent or invoiced, those prices would then no longer be correct. Such quotations therefore stay completely unchanged.
- **Quotations where the conversion would still change the prices** (for example due to rounding) also stay unchanged.
- In those two cases the lines keep the type 'Indirect costs' and calculate as before. You can set such a line to 'Other' yourself; check the price of the post afterwards.
- **Items:** items with cost type 'Indirect costs' become 'Other', as do the lines in the composition of composite items.
- **Price groups:** rules for 'Indirect costs' become rules for 'Other'.
- **Forecast changes:** forecast changes on a project with cost type 'Indirect costs' become 'Other'.

New lines can only be created as 'Other'; 'Indirect costs' is no longer in the selection list.

## What should you watch out for?

1. **'Margins' tab:** the default margin gets a field **'Margin other'** and the indirect cost margin gets a percentage for **other**. Fill them in if you want 'Other' lines to automatically get a margin or an indirect cost margin. If you leave them empty, nothing changes for those lines.
2. **Views, reports and exports** based on 'total costprice', 'margin' or 'indirect costs' show different figures for converted quotations and their projects. Do not simply compare figures from before and after the conversion.
3. **Recalculation:** budgeted and realised indirect costs are now comparable. The budget for indirect costs is lower than before; the difference now sits in the costs and the margin.
4. **From now on:** choose 'Other' for costs that belong to the post but are not material, labor, equipment or subcontracting. Use the indirect cost margin for your real overhead, and the 'direct costs' tab for a fixed amount you want to spread across the quotation.

|| Do you use the API? Wherever you pass or read the cost type, the value becomes `OTHER` instead of `COST`: for items, price groups, the lines in the line detail of a post and the forecast changes of a project. Adjust your own integrations and scripts accordingly.

###### Read also:

* [Setting your margins on a quotation](https://support.robaws.com/en/article/setting-your-margins-on-a-quotation-1vt9lep/)
* [Adding direct and indirect costs to your quotation](https://support.robaws.com/en/article/adding-direct-and-indirect-costs-to-your-quotation-cevyc/)
* [The financial overview of a project](https://support.robaws.com/en/article/the-financial-overview-of-a-project-1no1kzb/)
* [Project recalculation](https://support.robaws.com/en/article/project-recalculation-1sitd2t/)
* [Quotations | Analysis](https://support.robaws.com/en/article/quotations-analysis-18mg9ns/)