Weight Rule to Determine Precedence

Most users are associated with a standard billing rate. However, the billing rate may vary depending upon the client, project or task for which the work is being done. Rate precedence permits you to define default rates for users, clients, projects, tasks and work types; these can then be overridden on a case-by-case basis.

Rate Rule Objects and their Weight

Note: * Rate Cards take precedence over all other Rate Rules and apply only for Billing.

Example 1:

A billing rule, named Software Consultant, of $100/hr is defined in Financial Setup.

Another billing rule, named Preferred Customer, of $80/hr. is also defined in Financial Setup.

Peter is assigned the Software Consultant rate without dependency. He is also assigned the Preferred Customer rate with a dependency on Client ACME Inc.

On a Monday, Peter spends 6 hours on Project P1 belonging to Customer C and 4 hours on Project P2 belonging to ACME Inc. The total revenue for that day attributed to Peter is calculated as follows: 6 * $100 + 4 * $80 = $920

Example 2:

In addition to billing rules in the previous example, two other rules are also defined in Financial Setup:

A billing rule, named Architecture Design, of $200/hr. is defined in Financial Setup

Another billing rule named P5 Project, of $130/hr. is defined in Financial Setup

Mary and Bob are both assigned the Software Consultant rate without dependency. Mary is also assigned Architecture Design with dependency on the task call P5 Arch Design, and is assigned the rule P5 Project with dependency on Project P5 which belongs to ACME Inc. Bob is additionally assigned the Architecture Design rule with dependency on the Work Type Architecture Design.

On a Tuesday, Mary spends 3 hours working on P5 Arch Design task and 5 hours on P5 Planning task. Bob spends 8 hours on P5 Arch Design task.

The revenue for this day is calculated as follows: 3* $200 + 5*$130 = $1,250

The reason for applying these rates is the following:

Since the rule Architecture Design is made dependent on the task, the task by itself is dependent on the project and the client, therefore the weight for this rule is:

10 (for the task) + 100 (for the project) + 1000 (for the client) = 1110

Whereas the weight for rule P5 Project is:

100 (for the project) + 1000 (for the client) = 1100

Therefore, the first rule prevails.

As for Bob, since he is assigned the rate that is dependent on the task, that rate ($200) applies, and not his standard rate of $100, since the weight for the first one is one, versus zero for the latter.

If a fixed rate is specified for a project or a task, it overrides any rate that may be defined for users for that project or task.

For example, if a fixed rate of $10,000 is defined for the P5 project for an entire month, none of the variable rates mentioned in the examples above apply to this project.

Example

For example, a user may charge Client ABC Inc. $75.00/hour for all consulting purposes. Yet, if this user works on project Implementation for ABC Inc., then the client is charged $100.00/hour.

Business Scenario Example 1

• Project fixed billing rate overrides user's daily billing rate.
• Company X has defined for all of its consultants a fixed daily rate. This means that no matter how many hours worked in a day of consulting, consultants always bill the client the same rate for a day. This is the overall policy for the company for its consulting services.
• At some point, the company receives a new consulting contract in which the client requires that the project be split into different phase dates, each involving a deliverable. In this case the client agrees to a fixed billing rate per phase. The client is not concerned about the number of consulting days required to complete the specified deliverables; instead the client requires that the required work be completed for those dates.
• In this case, the system would override the consultant's fixed daily rate with the project's flat fee in those given date intervals.

Business Scenario Example 2

• User costing hourly rate with task dependency overrides user's hourly costing rate.
• User X has a standard hourly costing rate of a 100$/hour, except that managers want to make an exception for a specific type of work which requires more skills and effort from the given user. They would then create a rate with a task dependency, which then overrides the standard hourly rate of that user.

Business Scenario Example 3

• An organization has structured its departments according to services rendered. Each of the departments has billing rules defined by client for all of its members and their tasks. Since the department as a whole provides the same type of services internally, the organization defines its billing rates for charge back/invoice purposes.
• A scenario occurs where a member of a group does not inherit this billing rate for a specific type of work performed. An exception would then have to be created for that user, for that task which would then override the group/billing rate previously defined for that user.

Business Scenario Example 4

• Assume that organization A has a different billing rate for each client A, B and C. The only exception is that senior consultants are billed at cost plus 25% for any customer. Therefore the following rules would be created in PSA software:
• Client A: Billing rule of $100 per hour assigned to Client A; no need to create any user specific billing rules
• Client B: Billing rule of $10,000 fixed billing assigned to Client B; no need to create any user specific billing rules
• Client C: Billing rule of $1000 per day per assigned to Client C; no need to create any user specific billing rules
• Senior Consulting billing rule created as a Cost Plus (+25%) rule assigned to all senior consultants
• As the above example shows, by using the precedence chart, a complex scenario can be implemented using very few rules. The PSA rate engine is very flexible yet straightforward, and addresses simple to elaborate billing rule needs.
• Rules defined through the Financial Setup may be thought of as a library of cost and billing rules that may be used by the organization. These rules are not put into effect, however, until they are associated with a particular user or group. Therefore, the next step after rule definition is the association of rules.