Invoice Billing Formulas
When you add records to the Manage Project Billing Information screen, you must assign a billing formula to the record. Transaction-based formulas are those that include billings based on costs, loaded labor (T&M), or units.
If you select a transaction-based formula, the Open Billing Detail table is updated with transaction detail when you post journals; however, not all journal postings update the Open Billing Detail table. Only journals that contain transaction-based items update this table. Transaction-based journals include: Accounts Payable, Labor Distribution, Journal Entries, Cost Pools, and Units Usage.
In summary, the program looks to the Manage Project Billing Information table at the level at which the invoice is posted. If a transaction-based formula exists, transaction-based journals update the Open Billing Detail table. The journals update Open Billing Detail for this project and all of its related lower-level projects.
You can use three types of formulas in the calculation of billings.
- The first is a cost-based formula. Cost-based formulas burden direct costs with indirect costs and fee. Records stored in Billing Edit Detail are assigned a Transaction Type of COST on the Manage Open Billing Detail screen. Burden and Cost ceilings for billing purposes are considered, and provisional rates are applied.
- The second type of formula bases calculations on hours multiplied by a loaded billing rate. The program multiplies hours from Open Billing Detail by billing rates stored in the Labor History table to arrive at billing amounts. Records stored in the Billing Edit Detail table are assigned a Transaction Type of HOURS. Ceilings on hours by Employee and Labor Category are considered.
- The third type of formula bases calculations on units multiplied by a designated unit price. The program multiplies units posted through unit usage by unit prices stored in the CLIN Price Schedule or Product Price Schedule tables. Records stored in Billing Edit Detail are assigned a Transaction Type of UNITS. Ceilings on units are considered.
The following sections describe the computations for each billing formula in detail. The billing formula is applied to all levels of the project that fall below the invoice level. Costpoint displays an error message if you attempt to set up a billing record on the same project tree where a billing record has already been established. Use the following descriptions to evaluate the billing formula that meets the specifications of your project.
Cost Incurred Plus Fee on Cost
This transaction-based formula bills direct costs, burden applied to the direct costs, and a fee percent applied to both direct costs and burden. Costpoint uses the direct costs in the OPEN_BILLING_DETL table to calculate the invoice. Costpoint posts the direct costs to the OPEN_BILLING_DETL table when costs are posted to the general ledger. These direct costs are compared to any direct cost ceilings that have been set up in the CEIL_DIR_CST table for the project. Costpoint limits the amount of direct cost that is included in the calculation of the invoice if the amounts in OPEN_BILLING_DETL and BILLING_SUM exceed the direct cost ceiling amount in the CEIL_DIR_CST table. These ceilings are evaluated only if S_RBA_CD in the CEIL_DIR_CST table is set to A or B. This calculation results in allowable direct costs.
The rates in the YTD Provisional or Pd Provisional column on the Pool Rates subtask of the Manage Cost Pools screen are applied to the allowable direct costs and hours (if you are using hours-based pools). The column used depends on your selection of year to date or current period burdening methods on the Corporate Settings subtask of the Configure Project Settings screen. If burden ceilings exist on the Manage Burden Cost Ceilings screen. Costpoint compares them to the provisional rates on the Pool Rates subtask of the Manage Cost Pools screen. The lower of these two rates is used to calculate the burden that appears on the invoice. The result of this calculation is allowable burden (indirect) cost. Then Costpoint applies the fee to the direct and indirect costs. The fee amount is stored on the Manage Project Billing Information screen.
If a fee override exists in the OVRIDE_FEE_ON_BURD table, it is used to apply the burden on the direct and indirect costs. This happens only if the S_RBA_CD is B or A. The last step in the calculation process is application of total project ceilings. The Calculate Standard Bills screen checks for ceilings on Contract and Funded values for total project, cost, and fee. Costpoint combines the total amount to be billed in the BILL_EDIT_DETL with the total amount billed in the BILLING_SUM table to compute the inception-to-date billed. If the inception-to-date billed exceeds that ceiling, the excess is computed as an over ceiling amount and the total billing is reduced. Costpoint will apply this ceiling only if it finds a code of B or A on the Manage Total Ceilings screen.
Cost Incurred Plus Fee on Hours
This transaction-based formula bills direct costs, burden applied to the direct costs, and a fee on hours incurred. Costpoint uses the direct costs in the OPEN_BILLING_DETL table to calculate the invoice. Costpoint posts the direct costs to the OPEN_BILLING_DETL table when costs are posted to the general ledger. Costpoint compares these direct costs to any direct cost ceilings set up in the CEIL_DIR_CST table for the project. Costpoint limits the amount of direct cost used in the calculation of the invoice if the amount in OPEN_BILLING_DETL and the amount previously billed in the BILLING_SUM table exceed the direct cost ceiling amount in the CEIL_DIR_CST table. These ceilings are evaluated only if the S_RBA_CD in the CEIL_DIR_CST table is set to B or A. This calculation results in allowable direct costs.
The rates in the provisional column on the Pool Rates subtask of the Manage Cost Pools screen are then applied to the allowable direct costs and hours (if you are using hours-based pools). If burden ceilings exist in the CEIL_BURDEN_CST table, Costpoint compares them to the provisional rates on the Pool Rates subtask of the Manage Cost Pools screen. The lower of these two rates is used to calculate burden that appears on the invoice. These ceilings are evaluated only if the S_RBA_CD in the CEIL_BURD_CST table is set to B or A. The result of this calculation is allowable burden (indirect) cost.
Next, Costpoint applies the fee. The fee amount per hour that is to be multiplied by hours incurred is stored on the Manage Project Billing Information screen. The last step in the calculation process is application of total project ceilings. The Calculate Standard Bills screen checks for ceilings on Contract and Funded values for total project, cost and fee. Costpoint calculates the total invoice, cost, and fee ceilings by summing the calculated amounts on the current invoice and adding the previous invoice amount from the BILLING_SUM table. This results in inception-to-date total, cost, and fee billed. If the application finds a code of B or A, the ceiling is applied.
Enter Bill Manually
Use this formula if you plan to enter your invoice using the Manage Project Product Bills, Manage Manual Bills, or Manage Milestone/Percent Complete Bills screens. If you select this formula, no data is posted to the OPEN_BILLING_DETL table. You must set up the Manage Project Billing Information screen for your project even if you select a manual invoice. You cannot enter a record in the manual billing screens unless there is a record for the project on the Manage Project Billing Information screen. For more information on manual bills, see the individual screen documentation.
Loaded Labor Rate W/Fee Plus Non-Labor W/Burden W/Fee
Loaded Labor rate W/Fee Plus Non-Labor W/Burden W/Fee is a Time & Materials or hours-based formula. To calculate the labor portion of the invoice, this formula multiplies allowable hours by loaded labor rate and applies the fee to the total. Costpoint determines the allowable hours by summing the hours in the OPEN_BILLING_DETL table and comparing the hours by PLC to the ceilings on the Manage Total Ceilings, Manage Hour Ceilings, Manage Employee Hour Ceilings, and Manage Vendor Hour Ceilings screens. If the inception-to-date hours for the project are less than the ceilings entered on the ceilings screens, Costpoint calculates the hours as allowable. The hours in the OPEN_BILLING_DETL table are inserted during the labor posting processes. The allowable hours are multiplied by the billing rate in the OPEN_BILLING_DETL table. The billing rate is inserted into the OPEN_BILLING_DETL table by the Load Labor Rates process. The allowable hours multiplied by the billing rate are then multiplied by the labor fee entered on the Manage Project Billing Information screen. Non-Labor costs or hours (if you are using hours-based pools) in the OPEN_BILLING_DETL table are multiplied by provisional rate on the Pool Rates subtask of the Manage Cost Pools screen to obtain the burden amount. Costpoint calculates the fee by multiplying the non-labor plus burden by the non-labor fee rate found on the Manage Project Billing Information screen.
Labor Cost Times Multiplier plus Non-labor times Multiplier (Cost)
This formula's calculation is similar to a loaded labor rate. When you use this formula, Costpoint multiplies the direct cost transactions on the Manage Open Billing Detail screen by the labor multiplier rate entered on the Manage Project Billing Information screen. Project Labor Categories are not necessary for this formula. You can customize the multiplier rate for specific accounts on the Manage Multiplier Overrides screen. Similar to a loaded labor rate, the multiplier rate is used in lieu of any burdens or fees. The multiplier rate is applied to direct costs only; burdens and fees are not subject to the multiplier calculation. However, the calculated multiplier amounts are classified as FEE Trans Type on the Manage Billing History screen. Note that you cannot use a multiplier rate greater than "9.9999," which equates to "999.99%." The billing format looks like a Loaded Labor Rate format (for example, HOURS line types for labor accounts, COST line types for non-labor accounts). Similarly, Costpoint summarizes the non-labor costs from the OPEN_BILLING_DETL table and multiplies the result by the non-labor multiplier from the Manage Project Billing Information screen.
Labor Cost times Multiplier plus Non-labor times Multiplier (Hours)
This billing formula's calculation is similar to a loaded labor rate formula. When you use this formula, Costpoint multiplies labor and non-labor amounts by markup rates entered on the Manage Project Billing Information screen. Similar to a loaded labor rate, the markup rate is used in lieu of any burdens or fees. Costpoint applies the markup rate to direct costs only; burdens and fees are not subject to the markup calculation. However, the calculated markup amounts are classified as FEE Trans Types on the Manage Billing History screen. To use this formula, you must enter Project Labor Categories (PLCs) with all labor hours. Costpoint calculates the labor portion of this formula by multiplying the direct labor hours by the labor rate in the OPEN_BILLING_DETL table. The A rate type is used for each PLC. Even if a PLC is assigned another rate type, the program calculates labor using the A rate type. After multiplying the hours by the PLC A rate type, Costpoint multiplies the result by the labor multiplier rate on the Manage Project Billing Information screen. Costpoint calculates the non-labor portion of this formula by multiplying the non-labor amounts from the OPEN_BILLING_DETL table and by the non-labor markup rate found on the Manage Project Billing Information screen. You can customize the markup rate for specific accounts on the Manage Multiplier Overrides screen. Note that you cannot use a markup rate greater than "9.9999," which equates to "999.99%." The billing format looks like a Loaded Labor Rate format (for example, HOURS line types for labor accounts, COST line types for non-labor accounts).
Loaded Labor Plus Non-labor Plus Burden On Non-labor
This Time and Materials formula uses loaded labor rates, non-labor costs, and burden on non-labor costs to calculate the invoice. You must use Project Labor Categories (PLCs) in all labor entry when using this formula. The labor rates used with this formula contain all profit and markup amounts because no fee or additional markup is allowed with this formula. Costpoint calculates the labor portion of the bill by multiplying the hours incurred in the OPEN_BILLING_DETL table by the labor rate also stored in the OPEN_BILLING_DETL table. The labor rates are loaded in the OPEN_BILLING_DETL table by the Load Labor Rates process. The non-labor portion of the bill contains non-labor amounts from the OPEN_BILLING_DETL table. Costpoint calculates the burden by applying the provisional rates on the Pool Rates subtask of the Manage Cost Pools screen to the non-labor costs or hours (if you are using hours-based pools).
Loaded Labor Plus Non-labor w/Burden w/Fee
This time and materials formula uses loaded labor rates, non-labor costs, burden on non-labor costs, and fee on non-labor costs to compute the invoice. This formula requires the use of PLCs in all labor entry. Since there is no additional markup on the labor costs, the labor rate covers all profit and indirect cost amounts. The Calculate Standard Bills screen multiplies the hours in the OPEN_BILLING_DETL table by the associated labor rate for the PLC. The labor rates are loaded into the OPEN_BILLING_DETL table by the Load Labor Rates screen. Costpoint calculates the non-labor portion of the bill by extracting the non-labor amounts from the OPEN_BILLING_DETL table. These non-labor costs are burden with the provisional rates on the Pool Rates subtask of the Manage Cost Pools screen. An additional fee is added to the non-labor costs. You can enter the desired fee on the Manage Project Billing Information screen.
Loaded Labor Rate
This time and materials formula uses loaded labor rates only. There is no pass-through of non-labor costs, fees, or burdens. This formula requires PLCs with all labor entry. The labor rates assigned are enough to cover all profit and indirect costs. To calculate the bill, Costpoint multiplies the labor hours incurred by the loaded labor rates. The hours are taken from the OPEN_BILLING_DETL table. The hours are inserted into the OPEN_BILLING_DETL table by the posting programs. The loaded labor rates are inserted into the OPEN_BILLING_DETL table by the Load Labor Rates process.
Loaded Labor Rate Plus Cost Incurred On Non-labor (T&M)
This time and materials formula uses loaded labor rates and non-labor cost pass-through. It does not apply markup, fees, or burden to the non-labor costs. This formula requires the use of PLCs in all labor entry. The labor rates assigned to the PLCs include any fees or profit desired. The Calculate Standard Bills screen multiplies the hours incurred from the OPEN_BILLING_DETL table by the loaded labor rates. The incurred hours are inserted into the OPEN_BILLING_DETL table by the posting programs. The loaded labor rates are inserted into the OPEN_BILLING_DETL table by the Load Labor Rates process. Costpoint calculates the non-labor portion of the bill by inserting the non-labor costs in the OPEN_BILLING_DETL table into the BILLING_EDIT_DETL table.
Loaded Labor Rate w/Burden w/Fee plus Non-labor w/Burden w/Fee
This time and materials formula uses loaded labor rates with burden and fee as well as non-labor amounts with burden and fee. This formula requires the use of PLCs in all labor entry. Since burden and fee are added to both labor and non-labor costs, the loaded labor rates can include only the desired profit. The Calculate Standard Bills screen multiplies the hours incurred from the OPEN_BILLING_DETL table by the loaded labor rates. The hours incurred are inserted into the OPEN_BILLING_DETL table by the posting programs. The loaded labor rates are inserted into the OPEN_BILLING_DETL table by the Load Labor Rates process. Burden rates for both labor and non-labor are taken from the Pool Rates subtask of the Manage Cost Pools screen. Enter the fee amount for both labor and non-labor on the Manage Project Billing Information screen. All non-labor costs are from in the OPEN_BILLING_DETL table. There are also inserted into this table by the posting programs.
Manual Bills with Unbilled Detail
When you use this formula, transactions populate Open Billing Detail even though the formula is a fixed formula. If you select this option, you will probably do a Manual bill, Milestone bill, or Project Product bill for this type of project. With this formula, you can use the Adjust Open Billing Detail Records screen to transfer or write off transactions. Because transactions populate the Manage Open Billing Detail screen, you can make adjustments for fixed-price billings. You can also compute billable value on unbilled transactions by selecting the Transactions with zero bill rate check box on the Calculate Standard Bills screen.
Progress Payment
See the "Progress Payment Bills" topic for more information on this billing formula.
Rate Schedule Times Multiplier Plus Non-Labor Cost Times Multiplier
This formula is similar to loaded labor. This flexible, transaction-based formula allows you to bill labor using different types of hourly rates on the same invoice. The labor calculation consists of the following:
- Costpoint multiplies an hourly loaded billing rate set up by individual or labor category by allowable labor hours.
- Costpoint multiplies the lower of either a ceiling rate OR actual hourly rate by allowable labor hours. This amount is then marked up by the multiplier rates. Costpoint does not apply a multiplier to a rate of B.
- The rate schedule is determined on the Link Project Labor Category Rates to Projects screen and the Link PLC Rates to Employee/Vendor screen. Rates are set up with a rate type of A (Actual rate), B (Billing rate), or C (Ceiling rate).
- Costpoint applies the non-labor multiplier from the Manage Project Billing Information screen to allowable non-labor billing amounts to calculate billable non-labor.
This formula requires the use of PLCs in all labor entry. The allowable hours are taken from the OPEN_BILLING_DETL table. The loaded labor rates are inserted during the Load Labor Rates screen. The non-labor amounts are taken from the OPEN_BILLING_DETL table. The multiplier rates are stored on the Manage Project Billing Information screen.
Unit Price Transactions Only
This formula produces an invoice that contains only units to be billed. If you select this formula, the OPEN_BILLING_DETL table is not populated with transactions from any of the posting programs except Post Unit Usage. In order for the Post Unit Usage screen to populate the table, you must select the Post To Billings check box on the Manage Unit Usage screen when entering the units. For more information on billing units, see the "Units" topic. You should also use this formula if you wish to bill scheduled bills only.