Net rate, sell rate and the gap you are actually paid for

Every costing line carries 3 numbers. The net rate is what the supplier has contracted to charge you. The sell rate is what the client is quoted. The gap between them is your gross margin on that line. Only the first is a fact: it comes from a signed rate sheet and can be checked against one. The second is the output of a pricing rule and the third is arithmetic, which means a system that stores the sell rate and nothing else has thrown away the only input it could have verified.

That is the practical definition, and it is more useful than the textbook one. A net rate is not simply 'a rate without commission' — it is the number your accounts payable will eventually match against an invoice, so it is the anchor for both the quote and the reconciliation, and everything else on the line is derived from it.

Which of the numbers on a line is actually a fact

The fourth row is the one people forget when designing the schema. The contracted net rate is what you agreed; the invoice is what arrives, and the 2 diverge for reasons that are entirely ordinary — a late amendment, a room upgrade, a peak-date supplement nobody applied at quote time. Keeping both is what makes the gap explainable rather than mysterious, which is the subject of quoted margin and banked margin never agree.

What a spreadsheet holding only the sell rate cannot answer

Most costing sheets store the number the client pays and carry the net rate in a formula, a comment, or the head of whoever built the sheet. Everything below stops being possible at that point.

• Margin by supplier, by season and by product. Without a stored net you can total revenue and nothing else, so the question of which supplier relationship is actually worth having has no answer.
• A margin floor at discount time. A consultant dropping the price cannot be told they have crossed a threshold, because the system does not know where the floor is.
• Repricing when a contract changes. A new rate sheet should be able to recost live quotes; it cannot if the old net is not on the line.
• Variance against the supplier invoice. Reconciliation compares the invoice with what you agreed, and 'what you agreed' has to be a stored number rather than an inference.
• An audit of who changed what. When margin is typed rather than computed, the record shows a number and never a reason.

The number you are usually contractually barred from showing

Supplier agreements commonly bind the operator to keep contracted net rates confidential, and that constrains what a system may render. Check the clause in your own contracts rather than assuming a general rule — but design as though the constraint is real, because retrofitting it means changing every document template you have.

• Client documents show the sell rate and whatever breakdown you choose, never the net. An itemised quote exposing the buy price is the classic leak, and a CSV export is the second.
• Role-based visibility is not optional. Consultants need net rates; a seasonal contractor loading content does not, and neither does a support user.
• Trade channels raise a real question rather than an obvious one: whether an agent sees a net price or a commissionable one is a commercial decision, worked through in should trade agents see your net rates.

The fields that make a line reproducible a year later

A costing line that stores 2 amounts and a supplier name cannot be recomputed after either the rate sheet or the pricing rule moves. These are the fields that make it reproducible.

• The net amount, its currency code, and its unit — per person, per room, per night, per vehicle, per departure. The unit is where most mis-costings begin.
• The rate sheet identifier and version, so the line points at the PDF it came from: loading a rate sheet so prices stay traceable.
• The validity window and the occupancy basis assumed, because a net rate is true only for the dates and configuration it was contracted for.
• Whether taxes and service charges sit inside or outside the figure, as a field rather than a convention nobody wrote down.
• The pricing rule identifier and version behind the sell rate, since 1 net rate yields different sell rates as rules change: encoding markup that changes by supplier and season.
• The exchange rate used and the minute it was read, where the quoting currency differs from the contracted one.

A three-step test for whether you hold the net at all

1. Take a booked line at random from last month.
2. Ask the system what the supplier will invoice for it — the amount, the currency code, the unit and the contracted validity window.
3. Time how long the answer takes. If it requires opening a PDF, opening a spreadsheet, or asking the person who loaded the contract, you are storing a sell rate and a memory.

The reason this matters beyond bookkeeping is that net rates are rarely per person. A vehicle, a guide and a permit are contracted per departure, so adding 1 traveller can move the per-head number in ways that look wrong until you see the resources underneath — the failure traced in one more traveller and the per-head price collapses. Which revenue mechanic your engine should treat as primary, markup on a net rate or commission on a gross one, is settled in commission against markup as the primary price rule.

If your system cannot say what the supplier will invoice, it cannot tell you what you earned. It can only tell you what you charged, which is the half of the transaction you already knew.

Getting net rates into fields is usually the unglamorous part of the project, because they arrive as spreadsheets and PDF contracts in 40 different layouts. Extraction can be automated as far as a proposal — a parsed table, each figure marked with its source page and cell, and a person confirming before it becomes a live rate — which is the propose-then-confirm shape of most AI agents and automation work and, for the reasons in running AI agents in production, the only version we would put near a contracted figure. The costing model around it is covered in quoting, costing and where the margin goes, part of our wider travel and tourism work.

• net rate
• costing
• margin
• supplier contracts