Updating Rates

Updated rates may be needed at any time. The reasons vary:

  • An employee receives a raise
  • The cost of employee benefits or other overhead items change
  • A consultant raises her fee to you
  • Higher costs are anticipated in the new year
  • Recover profits siphoned by the weak economy of the past two years
  • A new service is offered

These events may happen periodically throughout the year or be part of quarterly or annual operational reviews. They may require updating of default bill and cost rates for employees and vendors as well as special rates in fee schedules. When updating special rates in fee schedules, you may also want to keep the old schedules for work-in-progress or as a special offer to current or new clients.

Below are suggestions for updating your rates.

Employee Rates

On the Rate tab of the Employee screen, replace the default Bill Rate and Cost Rate information for each employee. If your bill rate is based on the Cost Rate (e.g., a multiple), you would first determine the Pay Rate and the Overhead Multiplier, then determine the bill rate.

Be sure to check the Overtime Bill Rate and an Overtime Pay Rate. Overtime applies to time greater than 8 hours in a day or 40 hours in a week in most states and provinces. (You can set Standard Hours on the Detail tab for each employee.) BillQuick applies the default Overtime Bill Rate to Billing Hours to compute the bill value for the work done. Also, the default Overtime Pay Rate (times the Overhead Multiplier) is used to calculate the cost of overtime hours worked. If you do not charge overtime for work done, set the default Overtime Bill Rate to the same rate as the default Bill Rate. If you pay overtime to employees for the hours they work, then enter their default Overtime Pay Rate. This will ensure job costs are accurate.

Vendor Rates

On the Rate tab of the Vendor screen, add or update the default rates for each sub-consultant or other independent contractor. Typically, the process involves first negotiating the person’s or company’s hourly pay rate. Then using your internal overhead calculations, you would add the Overhead Multiplier. Together, these give you the vendor’s default rate for costing jobs. Finally, add your profit margin to derive the default Bill Rate for them.

Fee Schedules

On the Service Fee Schedule, you define the special rates that apply to projects done for clients. Common situations for fee schedules include:

  • For a particular project
  • For all projects done for a client
  • For a type of project
  • One for 2009 rates and another for 2010 rates

To setup a new service fee schedule, click the New button and give the schedule an ID and name that makes it easy to differentiate its purpose and use. If the new schedule is an update of an existing one, check the Schedule Based On box. Select the fee schedule to copy.

To add and edit rows, identify the combination of employee/vendor and activity for which a special rate applies.

  1. Select an individual employee or an employee group or a vendor or vendor group.
  2. Select the activity or group of activities that will be charged at a special rate.
  3. Enter the special bill rate. If you select individual employees or vendors, the special bill rate can also be defined as a multiple of their default Pay Rate or default Bill Rate.

In most situations you will want the cost value of hours worked to be based on the default cost rate or default overtime cost rate for the employee or consultant. However, if you wish to apply special rates, you can also define them in the schedule.

To view more columns in the Service Fee Schedule screen, select Field Chooser from the Edit menu. You can turn on/off columns with a click.

Activity Rates

Some professional services firms charge clients for work done based on the activity alone. You can set activity rates on the Activity Codes screen. You can define the cost rate, bill rate and the overtime bill rate for an activity.

If you do not see the rate columns in the Activity Codes screen, select Field Chooser from the Edit menu and turn them on.

Bob Wolff

BQE-sleeter-conf-2009

Leave a Reply


*

* Copy This Password *

* Type Or Paste Password Here *