FAQ: The Financial Summary & Margins (The "Big Formulas")

Published on April 28, 2026 QuoteX

Overview

This article details the core financial formulas and discount calculations used within QuoteX to compute project fees, delivery costs, and ultimate profitability metrics such as Average Sales Margin (ASM).

Core Financial Metrics

1. Total Fees

The sum of all resource fees, plus any billable Other Costs (e.g., software licenses) and travel expenses, provided they are configured to impact the project total.

2. Net Fees

The actual final amount charged to the client. Calculated as:

Net Fees = Total Fees - Total Discount + (Billable Other Fees) + (Billable Travel & Expenses)

3. Total Costs

Represents what the project costs your organization to deliver, varying by billing model:

Fixed Fee Projects: Includes uplifted service costs plus any non-billable internal expenses.
Time & Materials (T&M) Projects: Aggregates base service costs alongside additional internal costs.

Profitability & Profit Margins

The primary objective of these financial calculations is determining the Average Sales Margin (ASM), which reflects overall deal profitability.

Average Sales Margin (ASM) Formula:

ASM = 1 - (Total Cost / (Total Fees - Total Discount))

Discount Models

QuoteX supports multiple models for applying and computing discounts:

Discount Model	Description	Calculation Formula
Timeline Level	Discount applied globally across the entire project.	`(List Price - Adjusted Rate) × Total Hours`
Resource Level	Discount applied specifically to targeted individual resources.	`(List Price × Discount %) × Total Hours`
Both Levels	Combines both project-wide and resource-specific discounts.	`Sum of Individual Resource Discounts + Overall Project Discount`

Managing Third-Party & Vendor Costs

When adding third-party services or vendors, QuoteX allows direct margin management on those expenses:

Enter internal vendor costs in the Total Costs field.
Enter client billing rates in the Total Fees field.

Note on Vendor Margins:

The system automatically retains the difference between the Total Fees and Total Costs as your net margin on the line item.

Knowledge Article Number: KA-00233