Overage Charge Profile
Fields
See Commercial How To document 353
The Overage amount is calculated using a series of breakpoints and percentages.
The Base amount is the amount you will not be charging overage on, similar to a deductible.
•
|
Take the difference between the Base and the first breakpoint, apply the first %
|
•
|
Calculate the difference between the second and third breakpoints, apply the second %
|
•
|
Calculate the difference between the third and fourth breakpoint, apply the third %
|
•
|
Continue for up to 5 breakpoints and percentages
|
•
|
Calculate the difference between the last breakpoint and the Source Amount and apply the last %
|
•
|
Add all together to arrive at the Overage charge amount.
|
Example 1
The tenant has negotiated an arrangement to have a $250 deductible on all maintenance charges. After that he pays different percentages of the maintenance charges as follows:
50% of the next $500, 25% of any amount between $750 and $2000, 100% of any amount over $2000.
Overage Profile
Base
|
250
|
50%
|
Second
|
750
|
25%
|
Third
|
2000
|
100%
|
Scheduled Charges - Overage
Source Amount - $2,742.80
from the transactions in the owner ledger
1st Break - 250
formula: (Second - Base) x Base Percentage
calculations: (750 - 250) = 500 x 50%
2nd Break - 312.50
formula: (Third - Second) x Second Percentage
calculations: (2000 - 750) = 1250 x 25%
3rd Break (last) - 742.80
formula: (Source Amount - Third x Third Percentage
calculations: (2742.80 - 2000) x 100% = 742.80
Net Charge - 1,305.30
formula: the sum of each break, in this case 1st Break + 2nd Break + 3rd Break
calculations: 250 + 312.50 + 742.80
A charge is posted to the tenant for $1,305.30.
Example 2
Overage charges are calculated annually based on annual sales figures for the tenant. The first $7,000 in sales will not be subject to overage charges. After that, the following charges apply:
any amount between $7,000 and 10,000 will be charged 10%; between 10,000 and 15,000 will be charged 7%, between 15,000 and 18,000 will be charged 3%; and above 18,000 will be charged 1%.
Overage Profile
Base
|
7,000
|
10%
|
Second
|
10,000
|
7%
|
Third
|
15,000
|
3%
|
Fourth
|
18,000
|
1%
|
Account List - no account list is selected since this is not an amount that is found in the owner ledger. Instead, the sales figure will be entered in the Source Amount field in the Scheduled Charges function.
Scheduled Charges - Overage
Compile the overage charges. The Source Amount for the tenant will be 0. Fill in the Source Amount with the $25,000 and the amounts will be calculated.
1st Break - 300
formula: Second - Base x Base Percentage
calculations: 10,000 - 7,000 = 3,000 x 10%
2nd Break - 350
formula: Third - Second x Second Percentage
calculations: 15,000 - 10,000 = 5,000 x 7%
3rd Break - 90
formula: Fourth - Third x Third Percentage
calculations: 18,000 - 15,000 = 3,000 x 3%
4th Break - 70
formula: Source Amount - Fourth x Fourth Percentage
calculations: 25,000 - 18,000 = 7,000 x 1%
Net Charge - 810
formula: the sum of each break, in this case 1st Break + 2nd Break + 3rd Break + Fourth Break
calculations: 300 + 350 + 90 + 70
A charge will posted to the tenant for $810
|