The Cumulative Breakpoint Method calculates overage by accumulating sales throughout the calculation period.
Each month’s sales are added to the accumulated sales total. SIRE applies the breakpoint table to that accumulated amount and calculates only the additional overage generated during the current month.
How The Calculation Works
SIRE processes the months in chronological order:
-
Add the current month’s sales to the accumulated sales total.
-
Apply the breakpoint table to the accumulated sales.
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Calculate the cumulative overage for the accumulated amount.
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Subtract the overage already calculated for previous months.
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The result is the current month’s overage.
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Continue through the end of the calculation period.
The final overage is the sum of the monthly overage amounts.
Example Breakpoint Table
Assume the lease has the following breakpoint table:
|
Breakpoint Amount |
Overage Percentage |
|---|---|
|
$2,000 |
10% |
|
$4,000 |
8% |
|
$6,000 |
6% |
|
$8,000 |
4% |
Assume the calculation period includes these monthly sales:
|
Month |
Sales Volume |
|---|---|
|
January |
$5,000 |
|
February |
$7,000 |
Calculate January’s Overage
January sales are $5,000, so the accumulated sales are also $5,000.
The breakpoint calculation is:
|
Breakpoint Amount |
Excess |
Percentage |
Overage |
|---|---|---|---|
|
$8,000 |
$0 |
4% |
$0 |
|
$6,000 |
$0 |
6% |
$0 |
|
$4,000 |
$1,000 |
8% |
$80 |
|
$2,000 |
$2,000 |
10% |
$200 |
|
Total |
|
|
$280 |
January’s overage is $280.
Calculate February’s Overage
February sales are $7,000. The accumulated sales are:
-
January: $5,000
-
February: $7,000
-
Total accumulated sales: $12,000
Applying the breakpoint table to $12,000 produces cumulative overage of $640.
Because January already generated $280, February’s overage is:
$640 - $280 = $360
The monthly results are:
|
Month |
Sales Volume |
Accumulated Sales |
Monthly Overage |
|---|---|---|---|
|
January |
$5,000 |
$5,000 |
$280 |
|
February |
$7,000 |
$12,000 |
$360 |
|
Total |
|
|
$640 |
The final cumulative overage for the period is $640.
Calculation Period
The calculation period is determined by the Percentage Rent configuration on the lease.
For the cumulative method:
-
Sales entries are evaluated for the applicable tenant fiscal year period.
-
The period is based on the tenant fiscal year-end date and Billing Next Date.
-
SIRE uses whole calendar months when determining the period.
-
Sales entries outside the calculation period are excluded.
Only sales entries that also match the configured sales type are included.
Effective Breakpoint Tables
SIRE uses the breakpoint table that is effective for the calculation period.
If multiple breakpoint tables exist, SIRE selects the table based on its effective date and the period being processed.
Result Of The Calculation
The cumulative calculation produces a single Total Overage amount.
That amount is used by the Percentage Rent billing process to:
-
Compare the overage with the configured sales base amount.
-
Apply any configured cap.
-
Apply the configured rounding option.
-
Determine the final invoice charge.
See Bill Percentage Rent for the complete billing workflow.
Frequently Asked Questions
How Is The Cumulative Method Different From The Non-Cumulative Method?
The cumulative method adds sales across the calculation period before applying the breakpoint table. The non-cumulative method calculates each month independently.
Why Is Previous Overage Subtracted?
The breakpoint table is applied to the accumulated sales total. Subtracting previous overage prevents the same sales from being charged more than once.
Are Sales Entries Outside The Calculation Period Included?
No. Only sales entries within the calculation period and matching the configured sales type are included.
Which Breakpoint Table Is Used?
SIRE uses the breakpoint table effective for the calculation period.
What Happens If No Qualifying Sales Entries Are Found?
No overage is calculated, and the Percentage Rent preview indicates that no qualifying sales entries were found.
Is The Total Overage The Final Invoice Amount?
Not necessarily. The Total Overage is compared with the sales base amount, and any configured cap and rounding options are applied before the final invoice amount is determined.