Depending on your process, the services & expenses entered on projects can have their rates/markups defined in a variety of ways to archive the desired workflow.
This guide will describe different ways & sources you can pull rates/markups from.
The end result is that all billing rates/markups are set per project, knowing this will help you determine how to set up your existing projects, project templates, clients, services, expenses and other related records.
- If you have rates based on each client. Then we recommend you can create a rate sheet for each client and apply it to their client record.
- If you change rates each year, then we recommend you create a rate sheet for each year. You can then apply this to each client or set up the system in a way that it applies to each new project created.
NOTE: If you change the get rate/markup from an active project with transactions (time and/or expenses) already entered. Then there are a few things to consider.
- If you want a project created last year to maintain its rates in the new year, yet have projects created in the new year to have new rates. Then leave the existing projects and their associated rate sheets as is. Then create a new rate sheet and name it "Rates 2023". At this point, you can update your client records to use this going forward and/or set this rate sheet manually per project.
- If you choose to update the existing rate sheet, then all new transactions & existing transactions that have NOT been approved will use the updated rate sheet values. However be careful to not press 'recalculate labor rates' from the project, as this will change the rates for all unbilled time on the project, even if it's approved.
What you have set in transaction preferences will be applied to all new clients that are created. However, you can modify the individual client's records after they have been created.
Each client can have a unique setup that will then apply to projects you create for this client. But you can change this per project after that.
Each project can have a unique setup as well after they have been created.
Get labor rate from
This section will explain the different choices you have of where to get labor rates from.
For more ideas on scenarios you may encounter, check out the Get labor rate from [in-depth guide].
When a client is selected, during the creation of a project the project will use the 'get rate from' setting specified in the client record. For example, if the client record is set to obtain rates from a service rate sheet, the project will also use this setting. However, if the 'get rate from' setting is changed for the client after the project has been created, the project may not automatically update to reflect this change and will need to be manually updated.
- This is maintained in the Projects > Accounting tab, and can pull initially from the client's record.
When a project is used, an option will appear below this for you to enter a flat rate for all time entered, regardless of the rate on the actual service used. Now you do have the option of 'override rate for non-billable services', what this means is that if your service has a rate of $0, then it will bill it at $0 instead of the project rate.
- This is maintained in the Projects > Accounting tab.
When a project/user is selected, it then applies the employee's rate from their employee record to the project. Also, a new option appears called 'staff rates', this is where their employee rate is applied to at that time. Note that if you update the employee rate in their employee record, it will not automatically update the staff rates on the project, you will have to do that manually for each project.
- This is maintained in the Projects > Accounting tab, and pulled initially from the Employees record > Hourly cost.
This is the default setup of each new system. When service is used, the project will pull from your system's current services for all unbilled time. So if you change your service rates, they will be applied to all unbilled time. The con here is that if you adjust your service rates and don't want to bill those new rates, then complete your billings at the current rates before updating.
- These are maintained in System setup > Time & billing > Services.
Service rate sheet
This is the recommended alternative to services. Where it allows you to create a list of your base services, choose the rate to bill for each & apply that rate sheet to a group of projects, while other projects pull from different rate sheets. Then if rates change on other rate sheets or base services, the project will continue to use the rates set in its rate sheet. Note that similar to services, if I change a rate in a rate sheet, then unbilled time will use that changed rate.
- These are maintained in System setup > Time & billing > Service rate sheets.
When a task is used, it will pull the billing rate that is set up in the task. So this lets you bill a task at one rate and another task at a different rate. Now while this sounds good, this is not the recommended way to use the system, and your estimates, invoices and eventual reporting need to be tailored to account for this. NOTE: If you do this, then only enter time against the task and not expenses.
- This is maintained and set up per task, estimate, and in billing.
Get markup from
This section will explain the different choices you have of where to get the markup from.
For more ideas on scenarios you may encounter, check out the Get markup from [in-depth guide].
If set in your project templates, then it will apply the 'get markup from' in the client record to the new project.
If set on your existing project AND client, then it will be a single markup percentage for ALL expenses entered on the project.
If chosen, then another field will appear where you enter the markup percentage for ALL expenses entered on that project.
This will use the markup for each individual base expense items (purchase, expense report & media)
Item rate sheet
This will let you choose an 'item rate sheet' to apply.
If chosen, then the rate on the task will become the percentage markup for ALL transactions entered. NOTE: If you do this, then only enter expenses to that task and not time.