Depending on your process, the Services and Expenses entered on projects can have their Rates/Markups defined in a variety of ways to archive a desired workflow.
This guide will describe the different ways and where you can pull rates/markups from.
The end result is that all billing rates/markups are set per project, knowing this will help you to determine how to setup 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 then apply it to their client record.
- If you changes rates each year, then we recommend you create a rate sheet for each year. You can then apply this to each client or setup the system in a way that it applies to each new project created.
NOTE: If you change the Get Rate/Markup From on 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 2016". 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 and existing transactions that have NOT been approved, will use the updated rate sheets 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 its approved.
What you have set in Transaction Preferences will inherit to any new Clients you create. But you can change this per client after that.
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 the Labor Rates from.
For more ideas on scenarios you may encounter, check out the Get Labor Rate From guide.
When client is used, the project (during the creation of the project) will pull the Get Rate From set in the client record and then make the project use that setting. For example, if the client record gets the rate from a Service Rate Sheet, then when the project is created it will change to get rate from service rate sheet. The con here is that after the project has been created, if you then choose get rate from the client, and the client has something chosen other then client for the rate, it may not update it as expected and you will need to manually update where the project gets its rates from.
- This is maintained in the Projects > Accounting tab, and can pull initially from the Clients record.
When Project is used, an option will appear below this for you to enter in 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 Project/User is selected, it then applies the employees Rate from their employee record to the project. Also a new option appears called Staff Rates, this is where there 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 pull 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 systems 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 billing s at the current rates before updating.
- These are maintained in System Setup > Time and Billing > Services.
Service Rate Sheet
This is the recommended alternative to Services. Where it allows you to create a list of you base services, choose the rate to bill for each, and then apply that rate sheet to a group of projects, while other projects pull from different rate sheets. Then if rates changes 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 and Billing > Service Rate Sheets.
When Task is used, it will pull the billing rate that is setup in the task. So this lets you bill a task for one rate and a task for 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 setup 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 guide.
If set in your projects 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 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 and 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.