PSA: “Gross Margin %” in the Estimate Summary Is Misleading

What is the formua? What is the number reported?

I assume you're referring to the formula Aspire uses for what they label as “Gross Margin” in the Estimate Summary box of the Opportunity Estimate screen? Unfortunately, after multiple emails and a 30-minute Zoom session with multiple Aspire representatives (including one from their development team), we still haven’t received a clear explanation. They said they would "look into it," but no concrete answers have been provided. There was mention of it being an average of the individual service-level GMs within the opportunity, but after testing that theory this morning, it also seems to be incorrect.

In one real-life example, when we manually calculated a project’s estimated gross margin % using the standard accounting definition (which was also confirmed by Aspire’s estimate analysis report), we found an estimated gross margin that was a 17% difference from what Aspire showed in the Estimate Summary box.

It’s still unclear what this percentage actually represents, but given its prominent display in the "Summary" box directly below the total project value (the only two numbers shown there), it’s highly misleading to label it as "Gross Margin." In this case, it clearly isn’t.

I hope this is an isolated issue, but if not, it could lead to significant problems for users relying on this figure.

We rely on that GM so I’d like to see the actual GM on some projects. Where are you finding the estimate analysis report?  I’ve looked at the default Estimate Sheet and the Pricing Summary from the estimate 3-dot menu but they all have the same GM% as the Estimate Summary box.

We’re currently reviewing our project estimates, and while this issue isn’t affecting all of our proposals, it seems to be happening with the majority of our larger, more complex installation proposals (unfortunately, the highest-value ones—yikes). We just found an example where the gross margin % estimate was off by more than 20%!

The earlier example I mentioned was also for a large project, so we’re wondering if the issue might be related to the number of services/tickets within the proposal.

Once we have a better understanding of what’s causing this, either through our own investigation or feedback from the Aspire team, I’ll update this thread.

As for reports, we have custom ones set up under the “Print Estimate” option in the 3-dot menu. This particular report calculates the estimated gross margin using the standard accounting formula:
((Revenue - Direct Job Costs) / Revenue) * 100, or (GP / REV) * 100.

Might be a silly question but, there is a system setting to show GM without subcontractor costs, is that toggled on? 

This made me a bit nervous so I just had to review our larger projects (20+ work tickets), different reports and system settings etc. When I toggled that setting in the sandbox, I saw discrepancy on projects with subs.

Not silly at all, that did the trick, thank you so much!

And just like that you have been more helpful than the (now 4) Aspire reps I have discussed this with over the last week who have doubled-down on an explanation that it’s actually “an average of the service-level gross margins” (nope), and that yes, I have to expect that it’s going to be different than the project total gross margin (uh, what?)!

Thank you for saving me from a few more well-earned grey hairs!

Maybe I should submit a suggestion to the idea portal that if this toggle is switched on, a little asterisks or notification should pop up next to the estimated gross margin percentage in the estimate summary noting that the displayed margin estimate excludes subcontractor costs!

Hi @DStack - thank you for your feedback as we are constantly identifying ways to improve the software. I wanted to let you know our internal teams are well aware of your case and are investigating further how we can provide a better solution in the meantime.

If you do create an idea in the voting portal, please come back and share the link so we can vote for it.