Determining billing rates and cost rates

Determining billing rates

The system determines which billing rates will be used based on a combination of resource and billing role.The validation is done in the following order of priority:

1. If there is a match between the billing office, billing role and resource defined in the engagement and the billing office, billing role and resource specified for the task assignment, the system uses that billing rate.
2. If there is a match between the billing office and billing role defined in the engagement (with no resource defined) and the billing office and billing role specified for the task assignment, the system uses that billing rate.
3. If there is a match between the resource defined in the engagement (with no billing role defined) and the resource specified for the task assignment (with no billing role specified), the system uses that billing rate.
4. If there is no match between the resource defined in the engagement (with no billing role defined) and the resource specified for the task assignment (with no billing role specified), the system uses the billing rate specified for the resource in the User Setup dialog box

If no billing rate is found after the rules above have been applied, the system displays a "Billing rates cannot be found" message when users attempt to invoice time records for that task assignment.

When adding service items to budgets, the system applies the same rules to determine the billing rates. In addition, users can select a billing office/billing role combination that is not in the engagement. In this case, the billing rate from the billing office will be used for services in the budget. Rates can be overridden in the budget, therefore they do not necessarily match the billing office/billing role rates.

When adding service items to opportunities, the system uses the billing rate of the billing office and billing role specified for the service. Rates can be overridden in the opportunities, therefore they do not necessarily match the billing office/billing role rates.

Determining cost rates

The system determines which cost rates will be used based on the System Manager configuration of the billing office associated with the engagement (either resource-based cost rates or billing role-based cost rates) and a combination of the billing role and the resource.

Using billing role-based cost rates

When the billing office associated with the engagement is configured to use billing role -based cost rates, the system applies the following rules to determine the cost rate. The validation is done in the following order of priority:

• If there is a match between the billing office, billing role and resource defined in the engagement and the billing office, billing role and resource specified for the task assignment, the system uses the billing role cost rate from the engagement.
• If there is a match between the billing office and billing role defined in the engagement (with no resource defined) and the billing office and billing role specified for the task assignment, the system uses the billing role cost rate from the engagement.
• If no billing role is specified on the task assignment, no rate will be found; the resource cost rate is not used. You can select a resource only on the Billing rates tab of the Engagement dialog box and manually enter a billing role-based cost rate. If there is a match between the resource defined in the engagement (with no billing role defined) and the resource specified for the task assignment (with no billing role defined), the system uses the billing role cost rate from the engagement.

When adding service items to budgets, the system follows the same rules as above to determine the cost rate. In addition, users can select a billing office /billing role combination that is not in engagement. In this case, the cost rate from the billing office will be used for services in the budget. If no billing role is specified, the cost rate will be 0; the resource cost rate will not be used.

When adding service items to opportunities, the system uses the cost rate of the billing office and billing role specified for the service. Rates can be overridden in the opportunities, therefore they do not necessarily match the billing office/billing role rates.

Note: Cost rates can be overridden in the budget, thus they would not necessarily match the
billing office/billing role rates.

Using resource-based cost rates

When the billing office associated with the engagement is configured to use resource-based cost rates, the system applies the following rules to determine the cost rate. The validation is done in the following order of priority:

• If there is a match between the billing office, billing role and resource defined in the engagement and the billing office, billing role and resource specified for the task assignment, the system uses the resource cost rate from the engagement.
• If there is a match between the resource defined in the engagement (with no billing role defined) and the resource specified for the task assignment (with or without a billing role specified), the system uses the resource cost rate from the engagement.
• If no resource is defined on the engagement that match the resource specified for the task assignment, the system uses the cost rate specified for the resource in the User Setup dialog box.

When adding service items to budgets, the system follows the same rules as above to determine the cost rate.

Note: Different rules apply for cost rates of contractors. For more information, see the “About
cost rates for contractors” section in the “Contractor Information” chapter.