Back to P200: Project Accounting Extended Scenarios

Lesson 8: Configuring Employee-Specific Billing Rates

Part 4: Billing Rates and WIP Costs

This lesson explains how you can configure a billing rule to be used for billing with labor rates that depend on the

employee who performs the work. Billing Rates: General Information

You must establish an adequate pricing model in the project that you are managing to ensure that business outcomes are met, the project budget is used eﬀectively, and project revenues and costs are properly balanced. In Acumatica ERP, you can implement virtually any pricing model by using billing rates for configuring complex billing rules.

Learning Objectives

In this lesson, you will learn how to do the following:

Create a rate table code and rate type
Define a rate sequence
Define a rate table with particular rates
Use billing rates for billing projects with diﬀerent billing rates

Applicable Scenarios

You configure and use billing rates if you need to perform project billing so that the system applies the appropriate rate based on the dates when the work has been performed, as well as any of the following factors:

Particular projects and project tasks
Specific account groups
Certain inventory items
Specific employees

Billing Rate Configuration

A billing rate is an exact value used for calculating the amount and quantity of the invoice lines that are created by the billing rule steps of the Time and Material type. The process of defining a billing rate includes the configuration of rate table codes, rate types, rate codes, and rate sequences. A rate table is a set of billing rates that the system uses in the formulas of the billing rules during the billing of a project. A billing rate is defined for a particular date range; a rate table may include multiple rates with diﬀerent eﬀective dates. You can create a single rate table with multiple rate sequences and rate codes to be used for all projects, or define multiple rate tables to maintain diﬀerent pricing models for the projects based on diﬀerent factors. For example, you can create diﬀerent rate tables and select the rate table to be used for the project depending on whether a customer of a project is a local one or international one. In a rate table, for each rate type, you can define any number of rate sequences that include multiple factors that may aﬀect the rates. These factors can include specific projects, project tasks, employees, account groups, and inventory items. You narrow the applicability of the rate based on the combination of factors you select. For example, you can configure a separate billing rate for particular tasks of specific projects if particular employees work on these project tasks. Also, in each rate table, you can add rate codes, which represent an additional dimension in a rate table that you use to simplify the configuration of the rate table. By using multiple rate codes with one sequence, you can reduce the number of sequences that need to be configured for each pair of a rate table and a rate type. For example, instead of creating multiple sequences, each including the applicable rates for a particular employee, you can create only one rate sequence with the Employee check box selected on the Rate Lookup Rules (PM205000) form and create separate rate codes for each employee. As another example, suppose that you want to use diﬀerent rates for three projects. Instead of creating multiple sequences with the Project check box selected in the table on the Rate Lookup Rules form and specifying a rate for each sequence under one rate code, you can use only one sequence and three rate codes to define diﬀerent rates for these three projects.

Workflow of Rate Table Configuration

You configure a rate table with rates by performing the following general steps:

You create a rate table code on the Rate Table Codes (PM204200) form.
You create a new rate type on the Rate Types (PM204100) form. Before creating the rate type, you need to plan how many and which rate types you will need in billing and allocation rules. (Typically, diﬀerent rates are used for the billing of labor costs, revenues, and expenses.) When you configure billing or allocation rules, you will assign diﬀerent rate types to diﬀerent steps of these rules.
On the Rate Lookup Rules (PM205000) form, you create rate sequences for each combination of rate table code and rate type. Each sequence defines a group of options based on which the system will select the billing rate. You can select any combination of the Project, Project task, Account group, Inventory item, and Employee options. The sequence number specified in the Sequence column in the table defines the order in which the system will search for the rate in that row (starting from the sequence with the lowest number in the table).
On the Rate Tables (PM206000) form, for each combination of rate table code, rate type, and rate code, you select a rate sequence in the Sequence box. You select an existing rate code, or you create a new rate code by entering a new identifier in the Rate Code box. For the selected rate sequence, in the table on the Rate tab, you enter the exact values of billing rates with the date range during which the rates are eﬀective. Also, on the tabs that appear for the types of factors that were defined in the rate sequence, you specify the specific factors that will define the applicability of the rates that you enter for the current rate sequence. These factors may include particular projects, project tasks, account groups, inventory items, and employees. Also, you specify the exact values of the billing rates with their date ranges in the Rate column on the Rate tab; the system will use these rates as the value of the @Rate parameter.

On the Billing Rules (PM207000) form, you create a billing rule and assign particular rate types to billing steps. In the billing rule steps, you use the @Rate parameter to refer to a particular billing rate in the billing rule formulas. In each billing rule step, you can specify this parameter as a multiplier, addend, or constant in the Invoice Description Formula, Line Quantity Formula, Line Amount Formula, and Line Description Formula boxes on the Billing Rules form.

               You can also assign rate types to allocation rules steps on the Allocation Rules (PM207500)
               form. Then you specify the @Rate parameter in the formulas of the allocation rule so that
               the system will use its value during transaction allocation. You can specify the parameter in
               the Quantity Formula, Billable Qty. Formula, Amount Formula, and Description Formula
               boxes on the Allocation Rules form.

On the Projects (PM301000) form, you assign a particular rate table to each of the project tasks of the project.

Billing Rates: To Configure Employee-Specific Rates

In this activity, you will learn how you can define item-specific billing rates by using rate tables, and how to bill a project by using these billing rates.

Story

Suppose that the West BBQ Restaurant customer has ordered from the SweetLife Fruits & Jams company a training session for its employees on how to use juicers that were previously purchased. Alberto Jimenez, a SweetLife junior consultant, has provided six hours of training, and Todd Bloom, a SweetLife senior consultant, has provided two hours of training. The standard rate of the training service, which applies to junior consultants, is $50 per hour, while the rate for the training provided by the senior consultants is $60 per hour. Acting as the SweetLife project accountant, Pam Brawner, you need to configure the rate table that will provide billing rates based on the employee who performed the work and configure the appropriate billing rule that will establish the complex pricing model.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to provide the project accounting functionality.
On the Account Groups (PM201000) form, the LABOR account group has been defined.
On the Non-Stock Items (IN202000) form, the CONSULTJR and CONSULTSR non-stock items have been created.

Process Overview

In this activity, you will create a rate a rate table code on the Rate Table Codes (PM204200). Then on the Rate Lookup Rules (PM205000) form, you will define a rate sequence and the combination of settings that will be used for searching for the appropriate billing rate. Then you will configure the rate table on the Rate Tables (PM206000) form, and specify employee-specific rate values. Finally, on the Billing Rules (PM207000) form, you will configure a billing rule that uses the rate table with the applicable billing rates.

System Preparation

To prepare to perform the instructions of this activity, do the following:

Sign in to the system as the project accountant by using the brawner username and the 123 password.
In the info area, in the upper-right corner of the top pane of the Acumatica ERP screen, click the Business Date menu button, and select 1/1/2025 on the calendar.

Step 1: Creating Rate Table Codes and Rate Sequences To create a rate table and specify rate sequences with employee-specific billing rates, do the following:

To add a new rate table code, do the following on the Rate Table Codes (PM204200) form: a. Click Add Row on the form toolbar, and specify the following settings in the added row:

Rate Table: LABOR
Description: Employee Labor b. Save the rate table code.

To create a rate sequence, on the Rate Lookup Rules (PM205000) form, do the following: a. In the Summary area, specify the following settings:

Rate Table: LABOR
Rate Type: LABOR b. Click Add Row on the table toolbar, and specify the following settings in the row:
Sequence: 1
Description: Labor rate sequence
Inventory: Selected c. Save the rate sequence.

Step 2: Specifying Billing Rates To specify billing rates for diﬀerent sets of settings, do the following:

On the Rate Tables (PM206000) form, to configure a rate table for the senior consultant, do the following: a. In the Summary area, specify the following settings:

Rate Table Code: LABOR
Rate Type: LABOR When you select the rate type, the system automatically selects 1 as the Sequence.
Rate Code: CONSULTSR
Description: A labor cost rate for a senior consultant b. On the Inventory tab, click Add Row on the table toolbar, and in the row, select CONSULTSR as the Inventory ID. c. On the Rate tab, click Add Row on the table toolbar, and specify the following settings in the row:
Start Date: 1/1/2025
Rate: 60.00 d. Save the rate table.

To configure a rate table for the junior consultant, do the following: a. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:

Rate Code: CONSULTJR
Description: A labor cost rate for a junior consultant b. On the Inventory tab, on the table toolbar, click Add Row, and in the row, select CONSULTJR as the Inventory ID. c. On the Rate tab, click Add Row on the table toolbar, and specify the following settings in the row:
Start Date: 1/1/2025
Rate: 50.00 d. Save the rate table.

Step 3: Creating a Billing Rule To create a billing rule that uses employee-specific billing rates, do the following:

On the Billing Rules (PM207000) form, add a new record, and enter the following settings in the Summary area:

Billing Rule ID: TMLABOR
Description: Time and material with @Rate

In the Billing Steps table, click Add Row on the table toolbar, and enter the following settings in the row:

Step ID: 10
Description: Consulting

In the right pane, specify the following settings for the step selected in the le pane (which is the step you just added):

Billing Type: Time and Material
Account Group: LABOR
Rate Type: LABOR
If @Rate Is Not Defined: Raise Error If no rate has been found, the corresponding project transaction will not be presented in the invoice. With the Raise Error option selected, the error is raised during billing. This prevents project costs from being omitted.
Invoice Description Formula: ='Invoice for '+PMProject.ContractCD
Line Quantity Formula: =PMTran.BillableQty The invoice line quantity will be equal to the project transaction line quantity.
Line Amount Formula: =PMTran.BillableQty*@Rate The amount of the invoice line is calculated as the billable quantity of the project transaction line multiplied by the corresponding rate value.
Line Description Formula: =PMTran.Description
Use Sales Account From: Inventory Item
Create Lines with Zero Amount and Quantity: Cleared

Save the billing rule.
You have configured billing rates that are based on various settings and a billing rule that will use these rates for billing.

Billing Rates: To Bill a Project with Employee-Specific Rates

In this activity, you will learn how you can define employee-specific billing rates by using rate tables and how to bill a project by using these billing rates.

Story

Suppose that the West BBQ Restaurant customer has ordered from the SweetLife Fruits & Jams company a training session for its employees on how to use juicers that were previously purchased from SweetLife. Alberto Jimenez, a junior consultant of SweetLife, has provided six hours of training, and Todd Bloom, a senior consultant of SweetLife, has provided two hours of training. Alberto's rate is $50 per hour, and Todd's is $60. Acting as the SweetLife project accountant, Pam Brawner, you need to create a project to account for the provided services, enter the project transaction to record the provided work, bill the customer, and verify that all services have been billed at the appropriate rates.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to provide the project accounting functionality.
On the Customers (AR303000) form, the WESTBBQ customer has been created.
On the Non-Stock Items (IN202000) form, the CONSULTJR and CONSULTSR non-stock items have been created.
On the Account Groups (PM201000) form, the LABOR account group has been created.

Process Overview

In this activity, on the Projects (PM301000) form, you will create a new project, specify a billing rule and rate table
for it, and define the project tasks. Then you will bill the project and review the billed amount and quantities in the
prepared pro forma invoice on the Pro Forma Invoices (PM307000) form.

System Preparation

Before you begin performing the steps of this activity, in the info area, in the upper-right corner of the top pane of
the Acumatica ERP screen, make sure that the business date in your system is set to 1/30/2025. If a diﬀerent date is
displayed, click the Business Date menu button, and select 1/30/2025 on the calendar. For simplicity, in this activity,
you will create and process all documents in the system on this business date.

Step 1: Creating a Project To create a project, do the following:

On the Projects (PM301000) form, add a new record.
In the Summary area, specify the following settings:

Project ID: WESTBBQ7A
Customer: WESTBBQ
Description: Training for employees

On the Summary tab (Project Properties section), specify Task and Item in the Cost Budget Level box.
On the Summary tab (Billing and Allocation Settings section), specify the following settings:

Billing Period: On Demand
Billing Rule: TMLABOR
Rate Table: LABOR You defined the LABOR rate table on the Rate Tables (PM206000) form when you performed the Billing Rates: To Configure Employee-Specific Rates activity.

On the Tasks tab, add a row with the following settings to define the project task:

Task ID: TRAINING
Type: Cost and Revenue Task
Description: Training for employees
Status: Active
Default: Selected Notice that the billing rule and the rate table have been copied to the task settings from the project settings.

Save the project.
On the form toolbar, click Activate. The system assigns the project the Active status.

Step 2: Creating Project Transactions To enter the project transactions for the provided services, perform the following steps:

On the Project Transactions (PM304000) form, add a new record.
In the Summary area, specify the following description: Training for WESTBBQ7A.
On the Details tab, click Add Row.
Specify the following settings in the row:

Project: WESTBBQ7A
Project Task: TRAINING (specified automatically)
Cost Code: 00-000
Account Group: LABOR
Inventory ID: CONSULTJR
Quantity: 6
Unit Rate: 40.00 This transaction represents six hours of training provided by Alberto Jimenez.

Add one more transaction to the batch by clicking Add Row and specifying the following settings in the row:

Project: WESTBBQ7A
Project Task: TRAINING
Cost Code: 00-000
Account Group: LABOR
Inventory ID: CONSULTSR
Quantity: 2
Unit Rate: 45.00 This transaction represents two hours of training provided by Todd Bloom.

In the Summary area, make sure that the total billable quantity is 8 and the total amount is $330.
Save your changes, and on the form toolbar, click Release to release the project transaction.

Step 3: Billing the Project and Reviewing the Rates To bill the project and review the rates at which the provided services have been billed, do the following:

On the Projects (PM301000) form, open the WESTBBQ7A project, which you have created earlier in this activity.
On the Cost Budget tab, make sure that the system has updated the cost budget with two new lines from the project transaction that you have released.
On the form toolbar, click Run Billing. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.
On the Time and Material tab, review the invoice lines that the system has created based on the transactions prepared for billing (see the screenshot below). These transactions have been processed by using the TMLABOR billing rule, and the rates have been taken from the rate table assigned to the project task. The pro forma invoice includes the following lines:

The line with the CONSULTJR inventory item has a billed amount of $300, which has been calculated as 6 hours multiplied by $50.
The line with the CONSULTSR inventory item has a billed amount of $120, which has been calculated as 2 hours multiplied by $60. Figure: Lines for employee labor billed by rates
You have created a pro forma invoice for the customer and verified that the appropriate rates have been selected for the provided services.