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How do I use Cost Plus contract types in BillQuick?

Problem: How do I set up a project using cost plus contract in BillQuick?  What does the detail on the cost plus invoice refer to?

Solution: Steps for billing Cost Plus projects:
1. Set up the project.  Choose the Cost plus fixed fee or percentage.  Enter the Service amount and the fee or fee percentage.
2. Create a service fee schedule for the project
3. Using the field chooser in the service fee schedule, show the Pay Rate Multiplier.  Enter the appropriate value in the Cost rate field for line item.  Enter the pay rate multiplier for each line item.   Pay Rate Multiplier X Cost Rate = Bill Rate.  For example, BW’s cost rate is $25.00 per hour.  The pay rate multiplier is 2.25.  His bill rate is $56.25.  Follow this procedure for each unique combination of employee(group) and activity(group)
4. Assign the service fee schedule to the project on the Billing tab of the project.
5. In Billing Review, review and process the invoice.
6. Preview the invoice in Invoice Review.  
a. Direct Labor  is the hours reported X the cost rate on the service fee schedule
b. Direct labor subtotal is the total of each line of hours x cost rate
c. Overhead rate percentage is calculated by hours x billrate - hours x cost rate(from the SFS)/hours x cost rate.  In the example above, if BW works 6 hours then hours x billrate is $337.50.  Hours x cost rate is $150.00.  The overhead or indirect cost is $187.50.   Divide that by the cost $150.  The overhead percentage is 125%.  One hour costs $25.00 plus 125% of that hour ($31.25) for overhead= $56.25 Bill Rate
d. Direct Labor total is Hours x Cost Rate + Overhead.  
e. The Fixed fee is based on Billable Amount x (Fixed Fee / Contract Amount)
f. The percentage fee is based on Billable Amount x Fixed Fee %
7. BillQuick adds the profit percentage to the Net Bill before generating the invoice until the project is complete. With fixed fee, BillQuick tracks the fixed fee portion to ensure you do not over-bill.

1. Set up your project and choose the Cost + Fixed Fee or Percentage contract type.
2. Enter the Service Amount and Fee for the contract.
3. Now create a service fee schedule for the project, if required.
4. Using the field chooser in the Service Fee Schedule screen, show the Pay Rate Multiplier. Enter the appropriate value in the Cost Rate field for line item.
5. Enter the Pay Rate Multiplier for each line item. 

Pay Rate Multiplier X Cost Rate = Bill Rate
For example, BW’s cost rate is $25.00 per hour. The pay rate multiplier is 2.25. His bill rate is $56.25.  Follow this procedure for each unique combination of employee (group) and activity(group).

6. Save your SFS and return to the Project screen.
7. Assign this service fee schedule to the project on the Billing tab and save the project profile.
8. In Billing Review, review and process the billing records associated with this project.
9. Preview the invoices in Invoice Review.

a. Direct Labor is the Hours Reported x Cost Rate on the service fee schedule
b. Direct Labor subtotal is the total of each line of Hours x Cost Rate
c. Overhead rate percentage is calculated by Hours x Bill Rate - Hours x Cost Rate (from the SFS) / Hours x Cost Rate.  

In the example above, if BW works 6 hours then:

Hours x Bill Rate = $337.50
Hours x Cost Rate = $150.00
Overhead or Indirect Cost = $187.50
Overhead Percentage = 125%
One hour costs $25.00 + 125% of that hour ($31.25) for overhead= $56.25 Bill Rate

d. Direct Labor Total is Hours x Cost Rate + Overhead
e. The Fixed Fee is based on Billable Amount x (Fixed Fee / Contract Amount)
f. The percentage Fee is based on Billable Amount x Fixed Fee %

10. BillQuick adds the profit percentage to the Net Bill before generating the invoice until the project is complete. With fixed fee, BillQuick tracks the fixed fee portion to ensure you do not over-bill.


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Article Details

Last Updated
30th of September, 2013

Product
BillQuick, Web Suite

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