Billing Rules: To Modify a Billing Rule to Track New Expenses

This activity will walk you through the process of modifying a billing rule by adding a new step, so that you can bill a new type of expenses within projects.

Story

Suppose that the West BBQ Restaurant customer has contacted the SweetLife Fruits & Jams company and requested a maintenance service for a juicer. This is a new type of service that the company has not previously provided for any customer. SweetLife's employee has visited the customer and provided two hours of the new maintenance service.

Acting as the project accountant of SweetLife, you need to update the billing rule used in the project to track the new type of expenses and bill the customer for the provided services.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

• On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to support the project accounting functionality.
• On the Billing Rules (PM207000) form, the STANDARD billing rule has been created.
• On the Account Groups (PM201000) form, the MAINTSERV account group has been created.
• On the Chart of Accounts (GL202500) form, the 54500 - Maintenance Expense expense account has been created. The account has been mapped to the MAINTSERV account group.
• On the Non-Stock Items (IN202000) form, the MAINTSERV inventory item has been created. The 54500 (Maintenance Expense) account has been selected as the expense account of the item and the default price has been set to $80.
• On the Customers (AR303000) form, the WESTBBQ customer has been configured.

Process Overview

On the Billing Rules (PM207000) form, you will add a new step to the billing rule; for the step, you will configure processing transactions related to the new maintenance service. Then you will create a new project on the Projects (PM301000) form that includes a task for the maintenance service and uses the updated billing rule. You will also create project transactions on the Project Transactions (PM304000) form to record the provided maintenance work and update the actual project values. Finally, you will bill a project and review the prepared pro forma invoice on the Pro Forma Invoices (PM307000) form.

System Preparation

To prepare to perform the instructions of the activity, launch the MYOB Advanced website, and sign in to a company with the U100 dataset preloaded; you should sign in as project accountant by using the brawner username and the 123 password.

Step 1: Modifying a Billing Rule

To add to an existing billing rule a billing step to bill maintenance expenses with a fixed margin coefficient of 1.2, do the following:

1. On the Billing Rules (PM207000) form, open the STANDARD billing rule.
2. In the left pane, add a row, and specify the following settings for it:
   • Active: Selected
   • Step ID: 40
   • Description: Maintenance cost plus markup
3. In the right pane, specify the following settings for the step selected in the left pane:
   • Billing Type: Time and Material
   • Account Group: MAINTSERV

     In this step of the billing rule, the system processes a project transaction that debits accounts mapped to the MAINTSERV account group.

   • If @Rate is Not Defined: Set @Rate to 0
   • Invoice Description Formula: ='Invoice for '+[PMProject.ContractCD]
   • Line Quantity Formula: =[PMTran.BillableQty]

     The system uses the quantity of the project transaction as the quantity of each invoice line.

   • Line Amount Formula: =[PMTran.BillableQty]*1.2*@Price

     The invoiced amount is calculated as the billable quantity of the project transaction multiplied by the price of the related inventory item with the markup.

   • Line Description Formula: =[PMTran.Description]

     The system uses the description of the project transaction as the description of the invoice line.

   • Use Sales Account From: Inventory Item
   • Create Lines with Zero Amount and Quantity: Cleared
4. Save your changes to the billing rule.

Step 2: Creating a Project

To create a project that represents the maintenance work SweetLife will do for the West BBQ Restaurant customer, do the following:

1. On the Projects (PM301000) form, add a new record.
2. In the Summary area, specify the following settings:
   • Project ID: WESTBBQ
   • Customer: WESTBBQ (West BBQ Restaurant)
   • Description: Maintenance service for a juicer
3. On the Summary tab, specify the following settings:
   • Revenue Budget Level: Task
   • Cost Budget Level: Task and Item
   • Change Order Workflow: Cleared
   • Billing Period: On Demand
   • Create Pro Forma Invoice on Billing: Selected
4. To add a task to the new project, on the table toolbar of the Tasks tab, click Add Row on the table toolbar, and specify the following settings in the new row:
   • Task ID: SERVICE
   • Type: Cost and Revenue Task
   • Description: Maintenance service for a juicer
   • Billing Rule: STANDARD

     This is the billing rule you have modified in the previous step.

   • Status: Active
5. Save the project.
6. On the form toolbar, click Activate Project. The system assigns the project the Active status.

Step 3: Creating and Processing a Project Transaction

To update the actual values of the project, create and process a project transaction for two hours of maintenance work by doing the following:

1. On the Project Transactions (PM304000) form, create a new transaction, and in the Summary area, specify PM as the Module and Maintenance service for WESTBBQ as the Description.
2. In the table on the Details tab, click Add Row on the table toolbar, and specify the following settings in the row:
   • Project: WESTBBQ
   • Project Task: SERVICE
   • Cost Code: 00-000
   • Account Group: MAINTSERV
   • Inventory ID: MAINTSERV
   • Quantity: 2
   • Unit Rate: 80.00
3. On the form toolbar, click Save, and then click Release.
4. On the Projects (PM301000) form, open the WESTBBQ project, and on the Cost Budget tab, notice that a line with the cost of the provided maintenance service has appeared with an Actual Amount of $160.

Step 4: Billing the Project and Reviewing the Billed Amount

To bill the project and review the document prepared for the customer, do the following:

1. While you are still reviewing the WESTBBQ project on the Projects (PM301000) form, on the form toolbar, click Run Project Billing.

   The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form.

2. On the Time and Material tab, review the invoice line that the system has created for the project transaction that you processed in the previous step. The Billed Amount, which is calculated by using the line amount formula you have specified for the new step of the billing rule, is $192, which is the project transaction quantity (2) multiplied by the default price of the inventory item ($80) and then multiplied by 1.2.
3. On the form toolbar, click Remove Hold to assign the pro forma invoice the Open status, and then click Release. The system closes the pro forma invoice (which is now assigned the Closed status), and creates an accounts receivable invoice based on the pro forma invoice.
4. On the Financial tab, right of the AR Ref. Nbr. box, click the Edit button to open the accounts receivable invoice that the system created on the Invoices and Memos (AR301000) form.
5. On the form toolbar, click Remove Hold to assign the accounts receivable invoice the Balanced status, and then click Release to release the invoice.
6. On the Projects (PM301000) form, open and review the WESTBBQ project, which is shown in the following screenshot. Notice that in the Summary area, the Actual Income box now shows $192, which is the total amount of the invoice that you have processed. The Actual Expense box shows the amount of the project transaction that you have processed earlier ($160).

   
   
   

You have updated the project billing rule and billed the project for time and material by using this rule.