Overview Distributed Costs
Distributed Costs in INNERGY Takeoff allow you to spread indirect expenses across multiple products in your estimate - without creating a separate line item for each. Costs like freight, project management time, engineering fees, or shop setup charges apply to the job as a whole rather than to a single cabinet or panel.
Instead of cluttering your bid with dozens of small line items, INNERGY absorbs these costs proportionally into the affected products. The result: a cleaner budget presentation and a more accurate per-unit cost.
Pro Tip Common candidates for Distributed Costs include: delivery and freight fees, project management time, engineering or drafting overhead, shop setup and mobilization costs, and tooling or equipment charges shared across items. |
Setting Up Distributed Costs in Takeoff
Step 1 - Access the Setup Area
1. Open your Bid and launch the Takeoff application.
2. Click the Manage icon in the upper right-hand corner of Takeoff.
3. Select the Distributed Cost tab from the options presented.
Step 2 - Create a New Distributed Cost
4. Click the Create button to begin a new distributed cost entry.
5. Give it a clear, descriptive Name. Include the scope in the name - for example "Freight - Base Bid" or "PM Fee - Alt 1." This becomes important when managing multiple origins.
Step 3 - Define the Cost Details
• Cost Type: Fixed dollar amount or a percentage of the project total. Example: $300 flat freight fee, or 2% of total material cost.
• Application Type: How the cost integrates with the project - for example, as an indirect fabrication cost. This affects tax calculations, so select the type that matches how your company classifies the expense.
Step 4 - Assign to Budget Groups and Locations
6. Select the Budget Group where this cost applies - Base Bid, a specific Alternate, or a Change Order.
7. Decide whether the cost applies to all products or specific items.
8. If your project has location-based scoping, you can restrict the cost to specific zones or floors.
Step 5 - Finalize and Activate
9. Review all settings, then click Create to activate the distributed cost.
10. Verify in the Products tab that the distributed cost is reflected in the Distributed Costs field on affected products.
11. Click the Recalculate Distributed Costs and Labor button to push the allocation through to the budget.
Important Distributed Costs do not update automatically. After any change to products, quantities, or cost amounts, you must click the Recalculate Distributed Costs and Labor button. This is intentional - recalculation is computationally intensive and is not triggered automatically to protect performance on large bids. |
Applying Distributed Costs to Products
After creation, INNERGY automatically applies the distributed cost to products matching your setup criteria. You can adjust individual product allocations manually:
Manual Product-Level Adjustments
12. Select a product and open its details.
13. Locate the Distributed Costs field and add or remove costs as needed.
14. Click Recalculate Distributed Costs and Labor to refresh the budget.
Bulk Edit for Multiple Products
15. Navigate to the Products tab in the Budget section.
16. Use the bulk edit feature to apply a distributed cost to multiple products at once.
Products Added After Initial Setup
• New products will not automatically receive distributed cost tags.
• Manually assign the appropriate distributed cost to each new product.
• Recalculate and refresh the budget to capture the updated allocation.
Best Practice Recalculate distributed costs any time you: add new products, remove products, change quantities, modify a distributed cost amount, or change which products a cost is applied to. |
Understanding Cost Splitting - A Critical Behavior with Alternates
This is one of the most important behaviors to understand before working with Distributed Costs and Alternates. Getting this wrong will cause your base bid sell price to drop unexpectedly and your Alternate pricing to be inaccurate.
What Happens When You Copy Products Into an Alternate
When you copy products into an Alternate, INNERGY creates a replica of those products in the new origin. This replica also brings the distributed costs along with it.
Here is the problem: the distributed cost is now tied to the same SKU on two different products - one in the Base Bid and one in the Alternate. When you recalculate, INNERGY splits that distributed cost across both origins proportionally.
Before Recalculate | After Recalculate (Problem) |
Base Bid: $500 distributed cost Alternate: $500 distributed cost (copied) Base Bid sell price: $25.31 (unchanged) | Base Bid: $250 distributed cost (split!) Alternate: $250 distributed cost Base Bid sell price: DROPS because cost was split |
Important This splitting behavior applies to Alternates only - not to Change Orders (CORs). CORs behave differently because the opportunity has already been converted to a contract by the time a COR is created. See the Change Order section below for details. |
Correct Workflow: Distributed Costs with Alternates
INNERGY best practice is to create separate, scoped Distributed Cost entries for the Base Bid and each Alternate. Each origin owns its own distributed cost - they do not share one.
The Correct Setup Pattern
Best Practice One Distributed Cost entry per origin scope. "Freight - Base Bid" applies only to Base Bid products. "Freight - Alt 1" applies only to Alternate 1 products. Never let a single distributed cost entry span multiple origins. |
Step-by-Step: Setting Up an Alternate Correctly
17. Build your Base Bid with its own Distributed Cost entries (e.g., "Freight - Base Bid").
18. Create your Alternate origin in Takeoff.
19. Add the incremental products, materials, and labor for the Alternate inside the Alternate scope.
20. Go to Setup and create a new Distributed Cost entry scoped specifically to that Alternate (e.g., "Freight - Alt 1"). Do NOT reuse the Base Bid entry.
21. Recalculate Distributed Costs and Labor.
22. Verify in the Budget Summary that the Base Bid distributed cost total is unchanged and the Alternate shows its own separate distributed cost.
Fixing a Split That Already Happened
If you have already copied products into an Alternate and your Base Bid sell price has dropped, follow this remediation workflow:
23. Go to the Alternate products.
24. Edit each product and remove the distributed cost that was copied over.
25. Save the changes.
26. Click Recalculate Distributed Costs and Labor. Your Base Bid distributed cost total will be restored.
27. Now create a new Distributed Cost entry scoped to the Alternate, and apply it to the appropriate products.
28. Recalculate again and verify both origins show the correct totals in the Budget Summary.
Important Do not simply delete the distributed cost from Setup. Remove it from the individual Alternate products first, then recalculate. This ensures the full amount returns to its intended origin. |
How Alternates Display in the Summary
Once distributed costs are correctly scoped per origin, the Summary tab will show:
• The original Base Bid sell price (unchanged).
• The Alternate showing only the incremental difference - what it actually costs more (or less) to execute that scope.
Example: If your Base Bid is $25.31 and you create an Alternate where those same cabinets are 30 inches wide instead of 24, the Alternate summary will show only the incremental cost of making them wider - say, $383 - not the full cabinet cost. This is correct and expected when distributed costs are properly separated by origin.
Distributed Costs with Change Orders (CORs)
Change Orders behave differently from Alternates when it comes to Distributed Costs - and this distinction is important to get right.
Why CORs Do Not Split the Base Bid
By the time you are creating a Change Order, the opportunity has already been converted to a contract. That conversion locks in the Distributed Cost amounts at the product level. Each product in the contract already carries a fixed DC dollar value.
When you Clone or use Change in Change Order to copy products into a COR, INNERGY carries forward that already-locked DC value per product - it does not re-pool and re-split the original distributed cost. Your Base Bid sell price stays intact.
Key Distinction Alternates are built before contract conversion - the DC pool is still live and can be split by copying products. CORs are built after conversion - the DC amount per product is already locked in and travels with the product as a fixed value. |
The COR Challenge: Adding New Products
Here is where CORs require careful attention. Because the DC amount per product is locked at contract conversion, INNERGY has no automatic way to extend that same rate to products you add fresh to a COR. The cleanest solution is the same strip-and-rebuild pattern used for Alternates - applied to the entire COR.
When you need to add new products to a COR and want all products in that COR to share a consistent Distributed Cost:
29. Remove the existing DC from every product currently in the COR - both the cloned products that carried locked values and any new products you have added.
30. Save the changes.
31. Click Recalculate Distributed Costs and Labor. The locked DC values that traveled with the cloned products are now cleared.
32. Create a single new Distributed Cost entry in Setup, scoped specifically to this COR, covering the full amount you want distributed across all COR products.
33. Apply it to all products in the COR - both the cloned and the new ones.
34. Recalculate one final time and verify the COR totals in the Budget Summary.
Best Practice Stripping all DCs from the COR and rebuilding with one new entry is simpler and less error-prone than trying to calculate what rate to apply only to the new products. One entry, one recalculate, clean result. |
Two Concurrent CORs - Where Splitting Can Still Occur
While a single COR does not split the Base Bid, running two Change Orders simultaneously can create a splitting scenario - if the same product exists in both CORs. In that case, the locked DC value on that product is tied to two active COR origins, and recalculation will divide it between them.
If you are managing concurrent CORs that share products, treat them the same way you would treat Alternates: verify after recalculation that the DC totals on each COR are as expected, and create separate scoped DC entries for any net-new products introduced by each COR.
Accepted Change Orders
Only accepted Change Orders flow into the Project Budget, production work orders, and billing. When a COR is accepted in INNERGY, its products - and the distributed cost values they carry - become part of the project cost picture. Getting the amounts right before acceptance matters for both job costing accuracy and billing.
Quick Reference: Distributed Costs by Origin
Origin | DC Behavior | Splitting Risk | Key Action Required |
Base Bid | Live DC pool distributed across all tagged products. Recalculates on demand. | N/A - Base Bid is the source origin. | Verify sell price is unchanged after any Alternate is created. |
Alternate | Built pre-conversion. DC pool is still live. Copying products into an Alternate copies DC tags and causes splitting on recalculate. | HIGH - splitting occurs when products are copied in. Base Bid sell price drops. | Create a separate DC entry per Alternate. Remove copied DC tags immediately if splitting has occurred. |
Change Order (COR) | Built post-conversion. DC amount per product is locked at contract conversion. Clone/Change carries that fixed value forward - Base Bid is not affected. | LOW for single COR. POSSIBLE if two concurrent CORs share the same product. | If adding new products to a COR: remove all DC tags from all COR products, recalculate, create one new COR-scoped DC entry covering all COR products, recalculate again. |
For additional guidance, contact the INNERGY Professional Services team through support.innergy.com or the in-app chat.