What is Cost Plus Billing?
Cost plus billing is a billing method that captures actual costs for performing activities. You calculate customer billing amounts by marking up the actual cost. The markup is based on a percentage of the cost.
Cost plus billing charges customers for costs captured in an account category. The markup percent is determined by the account category or the billing record. The markup can be expressed as negative or positive.
Example
SBC uses cost plus billing to charge a 65 percent markup on all materials related to training activities. In November, material costs for client 1 were $30,000.
The billable amount is $30,000 x 1.65 = $49,500.