The Non-Cumulative Breakpoint Method calculates overage separately for each month in the calculation period.
Sales from one month do not carry over into the next month’s calculation. After each month is calculated independently, SIRE adds the monthly overage amounts to determine the total overage.
How The Calculation Works
For each month in the calculation period, SIRE:
-
Uses only that month’s qualifying sales.
-
Applies the lease’s breakpoint table to the monthly sales volume.
-
Calculates the overage for each exceeded breakpoint.
-
Adds the monthly overage to the total for the calculation period.
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:
|
Month |
Sales Volume |
|---|---|
|
July |
$10,000 |
|
August |
$7,000 |
Calculate July’s Overage
July sales are $10,000.
|
Breakpoint Amount |
Excess |
Percentage |
Overage |
|---|---|---|---|
|
$8,000 |
$2,000 |
4% |
$80 |
|
$6,000 |
$2,000 |
6% |
$120 |
|
$4,000 |
$2,000 |
8% |
$160 |
|
$2,000 |
$2,000 |
10% |
$200 |
|
Total |
|
|
$560 |
July’s overage is $560.
The excess is calculated by allocating the sales amount between the current breakpoint and the previous breakpoint. This prevents the same sales from being charged more than once.
Calculate August’s Overage
August sales are $7,000.
|
Breakpoint Amount |
Excess |
Percentage |
Overage |
|---|---|---|---|
|
$8,000 |
$0 |
4% |
$0 |
|
$6,000 |
$1,000 |
6% |
$60 |
|
$4,000 |
$2,000 |
8% |
$160 |
|
$2,000 |
$2,000 |
10% |
$200 |
|
Total |
|
|
$420 |
August’s overage is $420.
The $8,000 breakpoint was not exceeded, so no overage is calculated for that row.
Final Overage Amount
Because each month is calculated independently, SIRE adds the monthly overages:
-
July: $560
-
August: $420
-
Total overage: $980
The total overage is then used by the Percentage Rent billing process to calculate the final charge.
Calculation Period
The calculation period is determined by the Percentage Rent configuration on the lease.
Only sales entries that:
-
Fall within the calculation period.
-
Match the configured sales type.
are included in the calculation.
Sales from previous or future periods are not included in the current calculation.
Result Of The Calculation
The Non-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 Non-Cumulative Method Different From The Cumulative Method?
The Non-Cumulative method calculates each month independently. The Cumulative method adds sales across the calculation period before applying the breakpoint table.
Do Sales From One Month Affect Another Month?
No. Each month uses only its own qualifying sales volume.
Why Are Breakpoint Amounts Applied Without Double-Counting Sales?
The excess for each breakpoint represents the sales between that breakpoint and the next higher breakpoint. This ensures that each portion of sales is included only 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.
What Happens If A Breakpoint Is Not Exceeded?
No overage is calculated for that breakpoint.
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.