Indirect expenses are defined as all expenses related to keeping a field employee productive on the job but that can’t be easily tied to a specific job. In a post for REMODELER'S ADVANTAGE, Judith Miller takes a look at the process of calculating and planning for your indirect expenses as well as their importance.
One of the things that she points out is the need to know and calculate your default rate as well:
The PROOF of the accuracy of this rate shows in the Actual vs. Budget for the INDIRECT EXPENSE range over the year …. If you actually spend $150,000 in Indirect Expenses AND your field gross wages are $450,000 then the balance in the Indirect Expense range at year end will be ZERO. And you’ll earn another A++
Judith Miller has more on Remodelers Advantage.