Configuring and applying burden rates

1. Configuring burden rates for a cost center

Burden rates are configured for cost centers in System Manager. Burden rates are used to account for other types of costs (such as a portion of the rent, administration costs, etc.) that are not directly related to the item in question. The burden rate is multiplied by the cost rate defined for the billing role (if billing role-based cost rates are used) or the resource (if resource-based cost rates are used) to determine the burdened cost rate amount. For example:

Hourly resource cost rate: $200.00

Burden rate: 118%

Hourly burdened resource cost rate: $236.00

When cost rates for engagements, budgets and opportunity services are calculated with a burden rate, the results are displayed as standard cost rates.

After you create a burden rate it cannot be changed or deleted but it can be disabled. You cannot have more than one active burden rate with the same effective date.

2. Assigning the cost center to resources

When new resources are set up in Enterprise, they are assigned to a specific cost center. If a burden rate is configured for the cost center assigned to a resource in the User Setup dialog box, the burden rate will be applied to the resource’s cost rate whenever the resource is selected to perform work.

Determining the burden rate to use

To determine what burden rate to use, the system applies the following logic:

• If a resource is specified, the system applies the burden rate configured for the cost center assigned to the resource.

• If no cost center is assigned to the resource, the system applies the burden rate configured for the cost center of the resource’s workgroup.

For engagement budgets

If no resource is specified, or if no cost center is assigned to either the resource or the resource's workgroup, the system uses the cost center specified in the Billing Rate Information section on the Billing information tab of the Engagement dialog box to determine the burden rate for the budgets. 2

For project budgets

• If no resource is specified, or if no cost center is assigned to either the resource or the resource's workgroup, the system uses the cost center specified on the project profile to determine the burden rate.

• If no cost center is specified on the project profile, the system uses the cost center of the engagement.

Configuring burden rates for expenses

A default burden rate can be associated with an expense category and will be applied to the budgeted expense cost in the budget. When adding an expense to a budget, enter the burden rate percentage to be used as the default burden rate value for budget expenses. You can also select an option to allow users to override the burden rate when adding budget items.

For example, a burden rate of 118% (entered as 118) will convert a budget expense item of $200.00 to a burdened budget expense item of $236.00.

Configuring burden rates for products

A default burden rate can be associated with a product category and will be applied to the budgeted unit cost in the budget. When adding an expense to a budget, enter a burden rate percentage to be used as the default burden rate value for budget products. You can also select an option to allow users to override the burden rate when adding budget items.

For example, a burden rate of 118% (entered as 118) will convert a budget product unit cost of $200.00 to a burdened budget product unit cost of $236.00.