Charge and billing rates
Charge Rate
The Charge Rate is the contractor’s cost for a resource. Charge rates can apply to labor, equipment, material, or any type of resource. These costs also include any types of fringes, labor taxes plus insurances, and more. The costs are tracked within the Charge Rate’s Cost Category Breakdown in a resource rate. The charge rate is not a cost to the client and does not include any profit, markup or overhead. Charge rates can be setup for a resource by going to Setup tab > Resource Rates, then opening a resource rate record, and selecting the Charge Rate tab.
Billing Rate
You can set up billing rates for the various resource types. Note that labor resources have three billing rate scales corresponding to the three charge rate scales, while all other resource types have one scale for both charge and billing rates. In the Labor resource, both the charge and billing rates have three scales.
You can enter a billing rate markup in the Billing Rate Markup field as a dollar amount or as a percentage in the Billing Rate Markup % field. You can double-click on a resource rate to view the resource record.
The Billing Rate tab includes the following fields.
| Name |
Description |
|---|---|
|
Charge Rate |
The amount of money it costs a contractor to occupy a resource. Also known as the contractor’s cost. |
|
Billing Rate |
The amount a contractor charges a client to utilize a resource rate. The billing rate can also be viewed as how much money the client is expected to pay for utilizing one of those resources for a specified amount of time. |
|
Billing Rate Markup |
The dollar value amount of profit added to the charge rate that a contractor generally determines. This can include certain contractor fees that the contractor has deemed to include. |
|
Billing Rate Markup % |
The percent dollar value amount of profit added to the charge rate that a contractor generally determines. This can include certain contractor fees that the contractor has deemed to include. |
The below example shows a contractor’s Charge Rate of $27.48 in Scale 1. The Billing Rate Markup is 45% of the $27.48 Charge Rate, which is a $12.37 Billing Rate Markup. The total Billing Rate is $39.84, which is the price the contactor would charge a client.
Billing Rate Setup
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Use the Training Job for this example. From the Ribbon, select the Setup tab.
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On the Resources tab, select the Resource Rates drop down list, and then select Labor. The Resource Rate Register opens to the Labor tab.
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Select the LW WELDERD Welder Resource Code from the list.
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Select the Actions tab, and then select Open in the Edit section.
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After the Labor Rate Record opens, select the Billing Rate tab.
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Change the Billing Rate Markup % to 15 for Scale 1, then tab out of the field.
- The system automatically calculates the Billing Rate Markup field to $6.38.
- This represents 15% of the Charge Rate.
- The Billing Rate is now equal to the Charge Rate plus 15%.
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Change the Billing Rate Markup to $14.68 for Scale 2.
- The Billing Rate Markup % is now 23% and the Billing Rate is now $78.51.
- Scale 1 Charge Rate of $42.56 plus (half of $42.56) $21.28 equals a Scale 2 rate of $63.83.
- Scale 2 rate of $63.83 plus 23% equals a billing rate of $78.51
