Retroactive Rate Modifications vs Prospective Rate Modifications

During the life of a project, there may be modifications in the billing rates that are used on the invoices.

Billing rates can be either indirect cost rates or an amount per hour, which are applied to direct cost amounts or hours on "cost-reimbursable" projects, or they can be loaded labor rates, which are multiplied by direct hours on Loaded Labor Rate projects. If a project is a Loaded Labor Rate job with indirect rates burdening non-labor amounts or hours, it contains both types. Modifications in unit prices are excluded from the retroactive billing process.

Some billing rate modifications are on a prospective, or going-forward, basis. If the modifications are of this nature, they are not considered retroactive and, therefore, you can make the billing rate modifications without calculating retroactive bills.

You can make prospective billing rate modifications for cost-reimbursable projects by entering the new provisional indirect rates on the Pool Rates subtask of the Manage Cost Pools screen. Enter these new rates in the period in which they take effect. Cost-reimbursable projects are identified by either the Cost Incurred Plus Fee On Cost or Cost Incurred Plus Fee On Hours billing formulas set on the Manage Project Billing Information screen. For these project types, Costpoint multiplies transactions residing either in the Open Billing Detail table or posted there after the rate modification by the new indirect rates to arrive at the indirect cost amounts. You can show the indirect cost amounts from the new rates on the same billing lines as the original rates, or set up new billing lines for the new rates. Make modifications to the billing format on the Accounts subtask of the Manage Generic Billing Formats screen.

For loaded labor rate projects, you can make prospective billing rate modifications by entering new loaded labor rates on the Manage Project Labor Categories (PLC) screen, the Link Project Labor Category Rates to Projects screen, or the Link PLC Rates to Employee/Vendor screen, depending on the billing rate method you are using. Loaded labor rate projects are identified by the following billing formulas:

• Loaded Labor Rate
• Loaded Labor Rate Plus Cost Incurred On Non-labor (T&M)
• LLR w/Fee plus Non-Labor w/Burden w/Fee
• Loaded Labor Plus Non-labor Plus Burden On Non-labor
• Loaded Labor Plus Non-labor W/Burden W/Fee
• Labor Cost times Multiplier plus Non-Labor times Multiplier
• Rate Schedule times Multiplier plus Non-Labor Cost times Multiplier

Enter new, loaded labor rates by adding a new line to the applicable labor rate table and entering the PLC, the new rate, and the dates on which the new rate should be in effect. Changing any of the loaded labor rates causes an additional line to appear on the bill for each different PLC rate. If the billing formula applies burden to non-labor, you can modify the billing rate for this portion of the bill in the same fashion as for cost-reimbursable projects.

For projects in which the billing rates should take effect retroactively, you can make the modifications the same way as for prospective rate modifications, with one difference: you must use the Calculate Retroactive Billings screen to create a bill for the retroactive portion. The calculation of a retroactive bill produces a regular bill that you can review and modify on the Manage Standard Bills screen. On the Print Retroactive Billing Worksheet screen, you can print a worksheet that details how the retroactive bill was computed. Print retroactive bills from the Print Standard Bills screen and post them using the regular Post Standard Bills screen.