In some estimates, you may include a negative fee—such as a discount—and choose to distribute that fee back across your estimate line items. While this behavior is straightforward when all line items have positive costs, it can become more complex when negative-cost items are also present.
This article explains how negative distributed fees are calculated in Estimator and what happens when they are applied to both positive and negative cost line items.
Negative Fees Applied to Positive Cost Line Items
Consider an estimate that contains only positive-cost line items. When a negative fee is distributed across the estimate, Estimator reduces the burdened total of each item proportionally.
In this scenario:
- The negative fee is applied as a percentage of each item’s aggregate cost.
- Each line item’s burdened total is reduced by the same percentage.
- The calculation is simple and intuitive because all contributing costs are positive.
For example, if a negative fee of 10% is applied, each line item’s burdened total is reduced by 10% of its aggregate cost.
Negative Fees Applied to Negative Cost Line Items
Now consider a scenario where the estimate includes one or more line items with negative costs, while the negative fee percentage remains the same.
In this case, the results may appear unexpected at first:
- The negative fee still distributes across all line items.
- Positive-cost items are discounted as expected.
- However, negative-cost items receive an increase, rather than a further reduction.
This occurs because a negative value multiplied by a negative percentage results in a positive adjustment. As a result, the burdened total for a negative-cost line item moves closer to zero rather than further away from it.
In the below example, you can see that a negative cost line item of -$2000 has a Burdened cost of -$1800 (a $200 increase in our Total Cost) after applying a negative fee.
Summary
Negative fee distribution in Estimator follows consistent mathematical rules across the platform. However, when positive and negative cost items are combined, the resulting calculations can be more challenging to interpret.
When reviewing estimates that include both negative fees and negative-cost line items, be aware that:
- Negative fees can increase the value of negative-cost items.
- The final results may differ significantly from estimates containing only positive costs.
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