How to Manage Purchase Tax in your Roofr Proposals

What it does:

• Demonstrates the different methods to input material purchase tax amounts to accurately quote your items in proposals and material orders.
• This is a crucial step because supplier costs do not include tax amounts. By manually adding these tax calculations, your proposals will accurately incorporate all material costs, including any taxes paid to your suppliers.

Prerequisites:

• A Roofr Catalog with accurate item costs BEFORE material purchase tax.

Available On:  Pro, Premium, Elite

Here’s what we’ll cover in this article:

• How to adjust your material items to reflect the total cost of the material, including your purchase tax.
  • How to add purchase tax to your profit margin/markup column in Roofr proposals
  • How to include purchase tax when you have a supplier integration
  • How to add purchase tax manually at the unit cost level

👉 NOTE: ** Tax calculation varies by region. Please check with your local laws to ensure your taxes are being calculated correctly **

Material Purchase Tax Definition

Material purchase tax refers to the tax applied to items bought from suppliers when acquiring materials. This is distinct from sales tax, which is the tax that Roofr users charge to their clients on the final sale. Understanding purchase tax is essential for accurate cost calculations since supplier costs typically do not include these taxes, requiring manual addition during proposal preparation.

💡Pro Tip: Avoid Using the Proposal Tax Column for item Purchase Tax

• The tax column automatically applies the percentage on top of the margin
• We recommend using the tax column for sales tax that the Roofr user charges their client
• This can result in calculation discrepancies (especially with larger amounts)

Option 1: How to include purchase tax by using margin/markup and when using a supplier integration

💡Pro Tip: When using integrated pricing, you cannot directly modify the unit cost in your Roofr catalog, since prices are automatically pulled from your Supplier Branch. Instead, you can account for purchase tax in your Margin or Markup at the proposal level.

Step 1: Open the proposal you want to edit

• Navigate to the Job Card in your Roofr dashboard
• Click on the proposal you wish to edit (ensure that the proposal settings are set to ‘Margin’)
• Select ‘Edit option’

Step 2: Add the purchase tax to the margin column

• Find the item(s) you wish to add purchase tax to (unlink the margin cell in order to edit) and add that percentage amount to the margin column.

NOTE: If you already have a margin set on that item, simply add your tax percentage on top of that existing amount. (i.e. if your existing profit margin is 10% and you want to also add a 6% purchase tax via the margin method, you would set your margin to that item at 16%)

• Click ‘Save’.

💡Pro Tip: With this approach, your sales tax will be calculated as part of your gross profit, not as part of your cost of goods. Keep in mind that this portion of what appears as profit is actually allocated for purchase tax

Option 2: How to add Purchase Tax directly to the unit cost in your Roofr Catalog

👉 NOTE: We don’t recommend adding purchase tax directly to your unit cost.

COMING SOON! A purchase tax solution right in your Roofr Catalog.

Step 1: Locate Your Catalog Item

• Navigate to the catalog section of the Roofr Dashboard
• Find the specific item you need to adjust for purchase tax

Step 2: Adjust the Unit Cost

• Identify the pre-tax unit cost from your supplier (i.e. $100)
• Calculate the total cost including purchase tax (i.e. $100 + 6% tax = $106)
• Enter this total amount ($106) in the "Unit Cost" field

Need to add a percentage to multiple items? Here’s how to bulk edit Catalog items via CSV:

Step 1: Download your Roofr catalog CSV

• Navigate to the catalog section of the Roofr Dashboard
• Click ‘Manage Catalog’ and select ‘Download CSV’. Save the file to a place that’s easy to find.

Step 2: Bulk Adjust the items cost

• Open your saved excel file. Type the number that you need to multiply the cost by in a random cell below your items. (i.e. for 6% tax, type 1.06)
• Copy this number by selecting the cell and clicking ‘CTRL-C’
• Select all of the cells under the ‘cost’ column that you want to adjust for tax, right click and select ‘Paste Special’
• Select ‘multiply’ and click ‘ok’

Step 3: Re-upload your Roofr catalog

• Save your Roofr Catalog CSV
• In your Roofr Catalog, click ‘Reupload items’
• Click ‘Upload CSV’. Choose your updated excel file
• Click ‘Import’ to confirm

👉 Understanding How This Works

• When you integrate your items from the supplier, it will list the base cost ($100)
• However, your total cost will include applicable purchase tax (totaling $106)
• By adjusting the unit cost, this updated price will automatically populate in all your proposals, invoices, and other relevant document

PURCHASE TAX FAQ’s:

Why can’t I use the current proposal tax column for purchase tax?

• The tax column automatically applies the percentage on top of the margin. We recommend using the tax column only for sales tax that you charge to your client. Using it for purchase tax can result in calculation discrepancies, especially with larger amounts.

What's the difference between adding purchase tax to margin vs. unit cost?

• Adding to margin: When you add purchase tax to your margin percentage, it becomes part of your gross profit calculation. This is easier to implement when using supplier integrations but may make profit tracking less clear.
• Adding to unit cost: When you add purchase tax directly to your unit cost, it becomes part of your cost of goods. This makes it harder to separate from your true profit.

Will my clients see the purchase tax on their proposals?

• No, clients will not see the purchase tax as a separate line item. Purchase tax is incorporated either into your margin or unit cost calculations and is reflected in the final price, but it's not itemized separately on client-facing proposals.