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Discount is the percentage of the total charges the contractor agrees to have the company retain as their fee. Discounts are discussed and agreed to at the time the contractor signs on with the company.
As an example, if your total charges for services at a property is $1000.00 and a 20% discount was the agreement, you will bill $1000 but receive $800.
$1000×20% = $200
$1000 – $200 = $800
Contractors need to be aware that their TRUE discount is greater than whatever is agreed on due to the fact that the contractor supplies materials for each job and although these materials are not line items in the invoice, they are nevertheless part of the total expense for the job.
Let’s say you submit the above $1000 invoice and you receive your $800 but you supplied two locks, four 2×4’s and one sheet of 1/2 plywood. Let’s also say that your purchase price for these items is $30.
Your 20% discount agreement means that you just furnished $30 worth of material for $30 less 20% = $24. Not too bad a deal for the company – $30 worth of supplies for $24.
Just keep this in mind and watch your expenses and remember there are a lot of expenses involved in every job that you have to take into consideration to know if you are really making the money you think you are.
