Determine the rates structure

To determine the structure of your rates, you must be clear about a number of points:

To determine the rates structure:

1. Decide whether your company wants to use cost price rates (cost pricing).

   In actual costing, the cost price rate determines the cost amount that is involved in the realisation of the assignment and/or project.

2. Decide whether your company wants to use sales rates (sales prices).

   The sales rate determines the amount that you will charge your customer on your invoice.

3. Decide which calculation bases you want to use for determining the cost price. Take any exceptions into account.
4. Then do the same for the sales rates. Decide which calculation bases you want to use for determining the sales price. Take any exceptions into account. Determine whether these calculation bases for determining the cost price and sales price are identical. If it transpires that you use the same methodology for the cost price rates and the sales rates, then you can use the same calculation basis for both.
5. Describe these calculation bases and the associated rates and check whether fixed values are available for these calculation bases (see the Options section on this help page).
6. If the calculation bases do not exist, decide on names for the custom dimension.
7. For these calculation bases, identify the master data where you want to save the information.

For hours, you decide the calculation bases for these rates in the actual costing yourself. For the other costs - work types that were not created as a work type for hours - you can record both rates in the properties of the work types. For materials you can use the pricing structure for articles. You record the cost price rates in the properties of the Articles.

Note:

It is not mandatory to define rates in advance. If you have not added any rates, when you enter the actual costing you can manually specify the rates per line entered. However, if you have added rates, Profit will automatically suggest the appropriate rate when you enter the actual costing. If required you can deviate from the suggested rate per line entered.

Options

When you select the calculation bases you have the following options:

• Employee
• Dimension 1 to 5
• Project group
• Project
• Work type group
• Work type

Note:

You can add up to three calculation bases.

Example 1

Suppose that you have compiled the cost price for the employees and you want to use it for internal calculations. In addition, you want the project type for which the employee conducts work to determine the sales rate, but you also want to be able to make exceptions per employee or customer.

Solution:

Since the choices you need to make are all present by default, you choose the following configuration:

• Cost price: Employee
• Sales price: Employee, Project (customer), Project group (project type)

Note: 

As you can see in the example above, the most common calculation bases are already present, but you can also use the so-called dimensions. You can use these dimensions as a calculation basis if you cannot use the default calculation bases. So Profit Projects does not determine which calculation bases you should use - that is entirely up to you.

Example 2

Suppose you want to base the cost price on the employees, but you do not want to record this per employee, for example because you have hundreds of employees. So you look for a method to group similarly scaled employees together. This will enable you to define a cost price rate for a group of employees in one go instead of having to update each employee individually. Let us assume that you call this collection of employees the Employee group.

You may also want to group your customers in categories. Based on their classification into these categories, you want to apply differing sales rates for these customers. Let us assume that you call this collection of customers the Customer group. Additionally, the project type performed by the employee forms the other component of the sales price (project group).

Solution:

Only some of the calculation bases you want to use here already exist. Only the work type is an existing calculation basis (work type group). The two other calculation bases (employee group and customer group) are not existing calculation bases and these have to be created:

• Cost price: Employee group (dimension 1)
• Sales price:

  Customer group (dimension 2)

  Project group (project type)

This means that an extra dimension is created for the customers (project contacts or sales contacts) as well as for employees (the customer group and employee group, respectively).

Maximum number of custom dimensions: You can use up to five custom dimensions.

Hour type: In addition to the three calculation bases, there is another calculation basis that cannot be set up as variable, but that you can use. In fact, this is the fourth calculation basis. This calculation basis is usually used for an extra allocation such as overtime, weekend work, etc.

It is possible to identify and configure all the combinations. However, the trick is to configure this part of Profit Projects in such a way that only the basis is set up at the highest possible level. And then to define the exceptions to this basis. This saves a lot of work!

Note: 

All possible combinations for composing the rates are possible. However, there are a few constraints you must take into consideration:

• The maximum number of custom dimensions is 5:
• The maximum number of calculation bases is 3: 3 for the cost price and 3 for the sales price.