On the Cost Items tab the Update earning rules icon updates the earning rules for all associated cost items. For each cost item associated to a pay item, you can adjust the earning rules by Earning % and Earnings Timing. The Earnings timing indicates when you can earn revenue for a specific cost item associated to a pay item. You can select from the following earnings timing options:
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Percent complete – You will earn revenue based on the % complete of the cost item
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Start –You will earn all the revenue when the work of the cost item is started (e.g., Mobilization)
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Finish – You will not earn any revenue for the cost item until all the work is completed (e.g., QC item)
In this case for your Structural Steel Project, cost item 3 has an earning rule that equals 75% of the Earning Amount (Forecast) of the pay item’s final revenue. Respectively, cost item 5.2 has an earning rule of 25% of the Earning Amount (Forecast).
Since the Total Price of this pay item is $2,919,020.71, it is expected that cost item 3 will earn 75% of this amount, and cost item 5.2 will earn 25%.
Billing method of Cost plus
When the billing method of the pay item is set to Cost Plus, then the Update earnings rules option will be disabled. Therefore, the associated cost items of the pay item will earn revenue based on the assigned estimate resources’ billing rates and the % complete of the cost item.
Adjusting Pay Item Earning Rules
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On the Pay Items tab, select a pay item.
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Hover over to the right of the Description and click on the three black dots.
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Select Pay item details.
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Select the Cost Items tab.
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Click the Update earning rules icon.
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Change the Earning % percentages for each associated cost item so the total will equal 100%..
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Click Save.