Price Base

Definition

The Price Base determines whether rental orders are processed on a daily or monthly basis. Thus, there are two different price bases: Day (sets a flat daily rate for a rental object) and Month (sets a flat monthly rate for a rental object).
When selecting the Price Base Day, each day of rent will be invoiced at the corresponding daily rate.
When selecting the Price Base Month, each full month of rent will be invoiced at the corresponding monthly rate. In case no full months can be invoiced, due to a rental contract start or end within a month, a shared daily rent rate must be calculated. Depending on the month in question, this may lead to high variations.

Note

Please see the following calculation example for clarification:

  • In months with 31 regular days, the monthly rent rate is divided by 31: 2,500 $ / 31 days = 80.65 $ daily rent rate
  • In months with 30 regular days, the monthly rent rate is divided by 30: 2,500 $ / 30 days = 83.33 $ daily rent rate
  • In months with 28 regular days, the monthly rent rate is divided by 28: 2,500 $ / 28 days = 89.29 $ daily rent rate

There are different measures to account for these deviations:

  1. Create rental contracts with Price Base Day only:
  • Each day of rent (without interruptions or breaks) will be invoiced at its set daily rate.
  • The base calendar in rent classes determines, which days will be invoiced, e.g. only working days and no weekends.
  1. Set the standard quantity for invoicable days for all months:
  • You can determine that each month (no matter the actual number of days in the month) is to be invoiced with a fixed Number of days.
  • This enables an equal daily rent rate for each month in the year. But, depending on the month, this may lead to financial disadvantages on the customer's or vendor's side.

Note

Below you find another calculation example reflecting the stated issue (based on the values from above calculation example):

  • The Number of Days in Month is set to 30 what equals, given a monthly rent rate of 2,500 $, a shared daily rent rate of 83.33 $ which is valid for the entire year.
  • In months with 31 regular days the deviation to a daily rental price equals: 80.65 – 83.33 = –2.68 $.
  • In months with 28 regular days the deviation to a daily rental price equals: 89.29 – 83.33 = 5.96 $.

Read more

Price base in rent context

Synonyms

calculation basis | rent price calculation