Billing Rates and WIP CostsLesson 9

Configuring Complex Billing Rates

Back to P200: Project Accounting Extended Scenarios

Lesson 9: Configuring Complex Billing Rates

Part 4: Billing Rates and WIP Costs

This lesson explains how you can configure a billing rule to be used for billing customers for the different services provided for the project. These services may have different billing rates that depend on the employee who performs the work.

Billing Rates: To Configure Employee- and Item-Specific Rates

In this activity, you will learn how you can define complex billing rates with rate tables that define different rates for different services, and for the same services provided by different employees.

Story

Suppose that the West BBQ Restaurant customer has ordered the service of juicer installation from the SweetLife Fruits & Jams company, along with the service of employee training on operating the juicer. The juicer has been installed. Also, Alberto Jimenez, a junior consultant, has provided two hours of training, and Todd Bloom, a senior consultant, has provided six hours of training. All of the project tasks must be billed at different rates:

  • The installation work is provided at a price of $110 per hour.
  • The accompanying installation work is provided at a price of $90 per hour.
  • The standard rate of training, which applies to junior consultants, is $50 per hour.
  • The rate for the training provided by senior consultants is $60 per hour. Acting as the project accountant, Pam Brawner, you need to configure the rate table that will provide billing rates based on a combination of various settings.

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 Project Tasks (PM302000) form, the INSTALL and TRAINING project tasks have been defined.
  • On the Non-Stock Items (IN202000) form, the INSTALL and TRAINING non-stock items have been created.
  • On the Employees (EP203000) form, the EP00000002 – Todd Bloom employee record has been created.

Process Overview

In this activity, you will create a rate type on the Rate Types (PM204100) form. 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 applicable billing rate. Then you will configure the rate table on the Rate Tables (PM206000) form and specify rate values for the different combinations of parameters. 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

Before you start configuring billing rates, 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 Type and Rate Sequences To create a rate type and specify rate sequences with item-specific and employee-specific billing rates, do the following:

  1. On the Rate Types (PM204100) form, click Add Row on the form toolbar, and specify the following settings in the row:
  • Rate Table: TASKLABOR
  • Description: Billing rate for installation and training
  1. Save the added rate type.
  2. On the Rate Lookup Rules (PM205000) form, add a new rate sequence with the following settings:
  • Rate Table: STANDARD
  • Rate Type: TASKLABOR
  1. Click Add Row on the table toolbar, and specify the following settings in the added row:
  • Sequence: 1
  • Description: Installation of juicers
  • Project Task: Selected
  • Inventory: Selected
  1. Again click Add Row on the table toolbar, and specify the following settings in the row:
  • Sequence: 2
  • Description: Billing rates for other installation work
  • Project Task: Selected
  1. Again click Add Row on the table toolbar, and specify the following settings in the row:
  • Sequence: 3
  • Description: Training for employees
  • Project Task: Selected
  • Inventory: Selected
  • Employee: Selected
  1. Again click Add Row on the table toolbar, and specify the following settings in the row:
  • Sequence: 4
  • Description: Other work on training
  • Project Task: Selected The rate sequences should look as shown in the following screenshot.
         Figure: The rate lookup rule
  1. Save the rate sequences you have created.

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

  1. On the Rate Tables (PM206000) form, to configure the labor rates for installation work, do the following: a. In the Summary area, specify the following settings:
  • Rate Table Code: STANDARD
  • Rate Type: TASKLABOR When you select the rate type, the system automatically inserts 1 as the Sequence.
  • Rate Code: TASKLABOR
  • Description: Labor rates for installation b. 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: 110.00 c. On the Tasks tab, on the table toolbar, click Add Row, and in the row, select INSTALL as the Project Task. d. On the Inventory tab, on the table toolbar, click Add Row, and in the row, select INSTALL as the Inventory ID. e. Save the rate table.
  1. To configure the rates for the other installation work, do the following: a. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
  • Sequence: 2
  • Rate Code: TASKLABOR
  • Description: Labor rates for other installation work b. On the Rate tab, click Add Row on the table toolbar, and specify the following settings in the added row:
  • Start Date: 1/1/2025
  • Rate: 90.00 c. On the Tasks tab, on the table toolbar, click Add Row, and in the row, select INSTALL as the Project Task. d. Save the rate table.
  1. To configure the billing rates for training, do the following: a. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings in the Summary area:
  • Sequence: 3
  • Rate Code: TASKLABOR
  • Description: Labor rates for training b. 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 c. On the Tasks tab, on the table toolbar, click Add Row, and in the row, select TRAINING as the Project Task. d. On the Inventory tab, on the table toolbar, click Add Row, and in the row, select TRAINING as the Inventory ID. e. On the Employee tab, on the table toolbar, click Add Row, and in the row, select EP00000002 (Todd Bloom) as the Employee ID. f. Save the rate table.
  1. To configure rates for other training work, do the following: a. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
  • Sequence: 4
  • Rate Code: TASKLABOR
  • Description: Labor rates for other training work b. 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 c. On the Tasks tab, on the table toolbar, click Add Row, and in the row, select TRAINING as the Project Task. d. Save the rates.

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

  1. On the Billing Rules (PM207000) form, add a new record, and enter the following settings in the Summary area:
  • Billing Rule ID: TASKLABOR
  • Description: Time and material with @Rate
  1. In the Billing Steps table, click Add Row on the table toolbar, and specify the following settings in the row:
  • Step ID: 10
  • Description: Installation and training
  1. In the right pane, specify the following settings for the step selected in the le pane:
  • Billing Type: Time and Material
  • Account Group: LABOR
  • Rate Type: TASKLABOR
  • 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: Billing Rule
  • Sales Account: 40000 - Sales Revenue
  • Create Lines with Zero Amount and Quantity: Cleared
  1. 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- and Item-Specific Rates

In this activity, you will learn how you can bill a project whose billing rule uses employee- and item-specific billing rates.

Story

Suppose that the West BBQ Restaurant customer has ordered from the SweetLife Fruits & Jams company the services of juicer installation and employee training on operating the juicer. The juicer has been installed. Also, Alberto Jimenez, a junior consultant of SweetLife, has provided two hours of training, and Todd Bloom, a senior consultant of SweetLife, has provided six hours of training. The provided services should be billed at different rates. Acting as the SweetLife project accountant, Pam Brawner, you need to create a project to account for the provided services, and specify the applicable billing rules. Then you need to enter the project transaction to record the provided work, bill the customer, and verify that all services have been invoiced 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 Account Groups (PM201000) form, the LABOR account group has been configured.
  • On the Non-Stock Items (IN202000) form, the TRAINING and INSTALL non-stock item have been created.
  • On the Employees (EP203000) form, the EP00000002 – Todd Bloom employee record 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:

  1. On the Projects (PM301000) form, add a new project with the following settings:
  • Project ID: WESTBBQ7B
  • Customer: WESTBBQ
  • Description: Installation of a juicer and training for employees
  1. On the Summary tab (Project Properties section), specify Task and Item in the Cost Budget Level box.
  2. On the Summary tab (Billing and Allocation Settings section), specify the following settings:
  • Billing Period: On Demand
  • Billing Rule: TASKLABOR
  • Rate Table: STANDARD
  1. On the Tasks tab, add two project tasks with the following settings.
         Task ID                Type                  Description                                   Status

     INSTALL                Cost and Revenue      Juicer installation                           Active
                            Task

     TRAINING               Cost and Revenue      Training for employees                        Active
                            Task

    Notice that the TASKLABOR billing rule and the STANDARD rate table have been specified automatically for
    both project tasks.
  2. Save the project.
  3. On the form toolbar, click Activate. The system assigns the Active status to the project.

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

  1. On the Project Transactions (PM304000) form, add a new record.
  2. In the Summary area of the form, make sure PM as specified as the Module, and specify Installation of a juicer and training for WESTBBQ7B as the Description.
  3. In the table, add a transaction to the batch by clicking Add Row and specifying the following settings in the row:
  • Project: WESTBBQ7B
  • Project Task: INSTALL
  • Cost Code: 00-000
  • Account Group: LABOR
  • Inventory ID: INSTALL
  • Quantity: 4
  • Unit Rate: 80.00 This transaction represents four hours of juicer installation.
  1. Add one more transaction to the batch by clicking Add Row and specifying the following settings:
  • Project: WESTBBQ7B
  • Project Task: INSTALL
  • Cost Code: 00-000
  • Account Group: LABOR
  • Description: Other work on the installation
  • Quantity: 2
  • Unit Rate: 70.00 This transaction represents two hours of other work on the installation.
  1. Add the third transaction to the batch by clicking Add Row and specifying the following settings:
  • Project: WESTBBQ7B
  • Project Task: TRAINING
  • Cost Code: 00-000
  • Account Group: LABOR
  • Employee: EP00000002 - Todd Bloom
  • Inventory ID: TRAINING
  • Quantity: 6
  • Unit Rate: 45.00 This transaction represents six hours of training provided by Todd Bloom.
  1. Add the last transaction to the batch by clicking Add Row and specifying the following settings:
  • Project: WESTBBQ7B
  • Project Task: TRAINING
  • Cost Code: 00-000
  • Account Group: LABOR
  • Description: Other work on training
  • Quantity: 2
  • Unit Rate: 40.00 This transaction represents two hours of other work on training. The entered batch of project transactions should look as shown in the following screenshot. Figure: Batch of project transactions
  1. In the Summary area, make sure that the total billable quantity is 14 and the total amount is $810.
  2. Save your changes to the project transaction.
  3. On the form toolbar, click Release to release the batch of project transactions.

Step 3: Billing the Project and Reviewing the Rates To bill the project, do the following:

  1. On the Projects (PM301000) form, open the WESTBBQ7B project.
  2. On the form toolbar, click Run Billing. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.
  3. On the Time and Material tab, review the invoice lines that the system has created based on the transactions prepared for billing. These transactions have been processed by using the billing rule, and the rates have been taken from the rate table assigned to the project tasks. The pro forma invoice includes the following lines:
  • The line with the INSTALL project task and INSTALL inventory item has a billed amount of $440, which has been calculated as 4 hours of installation multiplied by $110.
  • The line with the INSTALL project task and with no inventory item selected has a billed amount of $180, which has been calculated as 2 hours of other work on the installation multiplied by $90.
  • The line with the TRAINING project task, the TRAINING inventory item, and the EP00000002 employee has a billed amount of $360, which has been calculated as 6 hours of training multiplied by $60.
  • The line with the TRAINING project task and empty inventory item has a billed amount of $100, which has been calculated as 2 hours of other work on training multiplied by $50. You have created a pro forma invoice for the customer and verified that the appropriate rates have been selected for the provided services. Part 5: Time and Expenses | 70