Billing Rates: General Information

You must establish an adequate pricing model in the project 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 MYOB Advanced, you can implement virtually any pricing model by using rate tables, and use billing rates for configuring complex billing rules.

Learning Objectives

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

• Create a rate table 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

Rate Configuration

To support an enhanced pricing policy for projects, you configure billing rates and use them in billing or allocation rules. To refer to a particular billing rate in the formulas of billing or allocation rules, you use the @Rate parameter. You can specify this parameter as a multiplier, addend, or constant in the Invoice Description Formula, Line Quantity Formula, Line Amount Formula, or Line Description Formula on the Billing Rules (PM207000) form. You can also specify the parameter in the Quantity Formula,Billable Qty. Formula, Amount Formula, or Description Formula on the Allocation Rules (PM207500) form.

The process of defining a rate includes the configuration of rate tables, 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 or the allocation rules during transaction allocation. 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.

Each rate table includes the definition of rates of all the rate types defined in the system. You can create a single rate table to be used for all projects, or define multiple rate tables to easily maintain different rates for the projects based on the customer for which the project is provided (for example, you can create different rate tables if you use different pricing models for local customers and remote customers).

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 projects, project tasks, employees, account groups, or 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. A billing rate could also be defined for a particular date range; a rate table may include multiple rates with different effective dates.

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 rate codes, you can reduce the number of sequences that need to be configured for each pair of rate table and 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.

Workflow of Rate Table Configuration

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

1. You create an empty entity that will contain the new rate table on the Rate Tables (PM204200) form. Later, during project creation, a user will assign a particular rate table to each of the project tasks.
2. You create an empty entity that will contain 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 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.
3. On the Rate Lookup Rules (PM205000) form, you create rate sequences for each combination of rate table 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).
4. On the Rate Tables (PM206000) form, for each combination of rate table, 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 new identifier in the Rate Code box; using rate codes helps to reduce the number of entries that need to be configured.

   For the selected rate sequence, in the table on the Rate tab, you enter rates with the date range during which the rates are effective. Also, on the tabs for the different types of factors that appear if they were defined in the rate sequence, you specify the factors that will define the applicability of the rates that you enter for the current rate sequence. 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 values as the @Rate parameter in the formulas of the billing and allocation rules.