Manage double costing from chargeable materials

  • Updated on Mar 27, 2026
  • Published on Feb 25, 2026
  • 4 minute(s) read
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Overview

When chargeable materials are billed on an Application for Payment (AFP) and also added to an invoice using invoice closeout, both costs and revenue are double counted in the project.

This article helps you understand how double costing occurs and describes ways to prevent double costing. This article also outlines steps you can do to fix existing double costing issues in your project.

Who uses this feature

  • Project managers, accountants, administrators, and estimators

  • Primarily for Residential Construction and Commercial Construction business types

Things to know

  • When your account is configured for chargeable materials, you have the option to charge a customer for material items. Material items appear as line items on the customer invoice. For more information, see Charge for materials on invoices and estimates.

  • If you use the Application for Payment workflow to invoice for your project’s revenue, you cannot use chargeable materials on the project’s sold estimate. Instead, use service tasks to hold the revenue. 

  • Manage jobs for a project from the project record:   

    • Book jobs directly from the project 

    • Duplicate existing jobs to create new jobs 

    • Attach existing jobs to a project

    • Move jobs from one project to another

Understand how double costing from chargeable materials occurs

Double costing can happen from chargeable materials when the following steps occur:

  1. A project estimate is sold with chargeable materials.

  2. A requisition is generated from the sold project estimate.

  3. An Application for Payment is generated that includes the chargeable material.

  4. Using invoice closeout, the chargeable material is also added to an invoice within the project. 

AFP invoices contain the chargeable material, in addition to the requisition workflow, which also adds the chargeable material through invoice closeout. 

As a result, both the cost and the revenue of the chargeable material are double counted in the project. 

Note: As a best practice, we recommend not including chargeable material items on your project if you plan to use the AFP workflow to generate your project invoices. Instead, use service tasks to hold the revenue for the chargeable materials. This ensures your non-chargeable materials can be included on job invoices to record inventory consumption and that the service task, which does not have a cost associated, can be used in the Application for Payment workflow.

Prevent double costing from chargeable materials

If your project requires the Application for Payment workflow, don’t include chargeable materials on your project’s sold estimate. 

Avoid using job invoices to bill for project revenue. In construction projects, job invoices capture costs and material consumption, while Applications for Payment or progress invoices capture revenue. 

If the needs of your contract call for certain materials to be visible on the schedule of values, add service tasks with parent project labels so that they can be billed for when submitting an application for payment. See Create project labels for more information.

Task details form showing quantity, unit price, and project labels for editing.

The parent project label then appears on the Continuation Sheet.

Table showing scheduled values and chargeable material example totaling four thousand dollars.

Fix double costing issues with chargeable materials

  1. Go to project record and click Financials from the side menu. 

  2. In the Invoices section, click the App for Pmt# invoice for which you want to remove double costing.
    Invoice table displaying pending status, total amount, and navigation options.

  3. The Continuation Sheet opens. To remove cost for an item, click in the This Period cell for the item and delete the value. 
    GIF of period being edited in the Continuation Sheet

  4. Ensure that the value is now $0.
    Continuation sheet showing work completed and financial details for specific periods.

  5. When finished, click Save.

  6. Return to the project and from the side menu, click Estimates. 

  7. Click the Estimate ID to open the sold estimate.
    Estimates overview showing sold status for estimate ID 2848620 by Bob.

  8. Turn off the Chargeable Materials toggle on the sold estimate.

  9. Perform one of the following actions on the non-chargeable materials:

    1. Incorporate the price of the chargeable materials into an existing service task. 

    2. Add a new service that contains the price of the chargeable materials. You can also add a project label hierarchy to avoid uncategorized budgets and actuals, if necessary.

  10. Return to the project record and from the side menu, click Financials. 

  11. Go to the Invoices section and click the invoice for which you want to update the Application for Payment. 

  12. A confirmation message opens on the Continuation Sheet. Click Refresh the Scheduled Value to undo your changes.
    Table displaying scheduled values, work completed, and financial details for construction tasks.


You can now continue with the Application for Payment workflow now that the estimate no longer contains chargeable materials.

Generate an Application for Payment

If you haven’t generated an Application for Payment yet::

  1. Go to the project record and click Estimates from the side menu. 
    Estimates overview showing sold status for estimate ID 2848620 by Bob.

  2. Click the Estimate ID for the sold estimate you want to open.

  3. Turn off the Chargeable Materials toggles on the sold estimate.

  4. Perform one of the following actions on the non-chargeable materials:

    1. Incorporate the price of the chargeable materials into an existing service task. 

    2. Add a new service that contains the price of the chargeable materials. You can also add a project label hierarchy, if needed.

  5. Return to the project.

Exclude line item costs on invoices generated through AFP

You can use the Include the cost of line items in invoices generated through Application for Payment option to either include or exclude Application for Invoice line items costs on invoices. This prevents double costing on chargeable materials or equipment when using the Application for Payment feature. You can enable this option in the following areas:

  • Application for Payment global settings screen

  • Application for Payment settings tab

Application for Payment global settings screen

To enable this setting in the global settings screen: 

  1. Go to the navigation bar and click Settings.

  2. From the side panel, click Accounting > Application for Payment.In the Application for Payment setting screen that opens, go to the Invoice Settings section and select the option.

  3. When you’re finished, click Save Changes. 

Note: This setting can be overridden within the Application for Payment settings tab.

Invoice settings with an option to include line item costs for payment applications.

Application for Payment settings tab

To enable this setting within a specific Application for Payment:

  1. Search for the project and go to the project dashboard.

  2. On the project dashboard, click Actions > Add Application for Payment.

  3. If this is a new Application for Payment, choose how you want the Schedule of Values to be filled up at the popup.

  4. On the Application for Payment screen that opens, click Settings.

  5. Select the Include the cost of line items in invoices generated through the Application for Payment toggle.

  6. When finished, click Save.

Settings page showing options for retainer collection and invoice line item costs.

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