About billing rate tables

A billing rate table is a rate structure that defines billing calculations. The tables you set up specify the rates at which labor, expense, or consultants are billed.

For you to make a profit, your billing rates must include the cost of overhead and a profit markup The percent applied to billable project costs to reflect the profit margin.. The billing arrangement with your client may specify a set billing rate The rate used to bill a client for work or expenses incurred on a project. Ajera determines the billing rate from the billing rate table. that has these costs and profit already factored in, or you may mark up your actual cost by specified percents. With Ajera, you can set up billing rate tables to accomplish both of these types of rate calculations.

You can create as many billing rate tables as you need to reflect billing arrangements with clients on particular projects. If your rate changes mid-project, you can specify multiple date ranges for the same table.

In the billing rate table, you can set overall markups or set up billing rates by:

• Employee, employee type, and activity for labor costs
• Activity and vendor for expenses and consultant costs

Rates can be calculated as a cost markup An increase to the cost amount to reflect direct personnel expense (DPE) and overhead. It is used for project reporting to calculate profit based on the real cost of the project. See also: billing markup, if you are using overhead to determine billing rates., a standard billing rate Also called flat rate. A set rate, with no markups, used to bill the client for services performed or goods delivered., or a pass through cost A cost billed directly to the client on the invoice without any markups..You can also override your actual cost rate The rate that reflects the actual cost without overhead or profit. For labor, it is the per hour rate paid to an employee. For salaried employees, it is the salary divided by the number of standard hours in the pay period. For hourly employees, it is the regular pay rate. For expenses, it is the rate per unit for expenses, such as mileage and copies. and employee type The classification of employees within an organization. It can by used for determining billing rates, setting billable targets, and sorting and subtotaling employee utilization on invoices and other reports. for billing purposes or set a maximum cost A cap placed on the employee cost rate for calculating a billing rate when based on a multiple of cost.. If you bill overtime or other premium hours, you can set up a premium markup An increase to the employee's pay rate to reflect pay for hours entered as premium time, such as overtime and double time. percent.

You can set up a rate table to calculate billing rates using:

• Standard markups
• A standard billing rate, also called a flat rate
• A combination of markups and standard billing rates

Learning Resource: Security and Setup Functional Guide

Markups

For your company to make an overall profit, you must increase your company's various costs when you bill the client. In Ajera, you begin building your rate table by defining the general way you want to increase, or mark up, all costs on a project. For example, you may want to mark up all direct labor costs by 30% to cover DPE, 150% to cover overhead cost, and an additional 10% for profit. In addition, you can identify exceptions to these general markups for a specific cost. For example, a principal’s direct personnel expense and overhead cost may be higher than your company average so you may want to mark up those hours by 40% for DPE, 160% for overhead, and 10% for profit.