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Issue/Symptom/Question

Standard Labor Pricing Schedule Window Description

Applies To

Penta for Windows

Reference Manual

Resolution/Fix/Answer

The Standard Labor Pricing Schedule window allows you to create, maintain and delete a set of rules that PENTA uses to bill labor on cost plus and time and materials jobs. A schedule consists of a sequenced list of rules that PENTA uses to convert costs to an invoice price. You can have multiple sets of rules on a schedule, one set for each effective date. PENTA uses these rules to:

  • Calculate invoice amounts for job labor.
  • Calculate earned revenue for unbilled job labor during revenue recognition.

Setup Tips

Labor pricing rules can be complex. You can use standard schedules to simplify creating these rules in two ways:

  • Assign a standard schedule to any of the following:
  • Customer – All jobs for this customer default to this pricing schedule.
  • Project – PENTA uses this pricing schedule for labor on this project.
  • Create a job specific schedule on the Job Labor Pricing Schedule window by copying a standard schedule and modifying it.

If a job has multiple pricing schedules, PENTA uses the first schedule that matches a labor transaction when calculating invoice amounts for the job. PENTA uses the following hierarchy when searching for a schedule:

  1. Job specific
  1. Standard schedule

During automated cost plus invoicing, PENTA tries to price all uninvoiced labor costs. PENTA determines which Labor Pay Rate/Markup to use by evaluating each rule in the assigned pricing schedule in ascending Sequence # order. PENTA uses the first rule that matches the cost transaction. A match occurs when one of the following is the same for both the cost and the rule:

  • Employee Id
  • Cost Type Code
  • Costcode
  • Payroll Class
  • Pay Rate

Consider the following when assigning sequence numbers:

  • To ensure PENTA selects the appropriate rates and markups, assign the lowest Sequence #s to the most specific pricing rule (e.g., employee specific rates should have a lower sequence number then rates by Cost Type).
  • Assign sequence numbers with large intervals, so that you have sequence numbers available for future rules. For example, use the sequence 100, 200, 300, and so on.

Note: If a Job has no pricing schedule (standard or job specific), PENTA first looks to the line item job for a corresponding pricing schedule in order to determine the Job’s cost. If the line item job has no standard or job specific pricing schedule, PENTA looks to the invoice job for a corresponding pricing schedule to determine the job’s cost.

Review

Billing & Accounts Receivable > Setup > Standard Pricing Schedules > Standard Labor Pricing Schedule

After using this window, you can use the Standard Labor Pricing Schedule report (which lists the details of the schedule) to review standard labor pricing schedules.

Top block

Schedule #

Use the Schedule # field to enter a 1-3 digit Id for the new pricing schedule you are creating.

Entry is required. No default.

Descr

Use the Description field to create a name/description for the Schedule #.

Entry is required. No default.

Effective Date

Use the Effective Date field to identify the date from which the pricing instructions should be copied.

Entry is required. No default.

Labor Pay Rate/Markups

Sequence #

Use the Sequence # field to control the order in which PENTA prices the labor for billing purposes. PENTA prices labor by applying the pricing rules in this Schedule sequentially starting with the lowest Sequence number. When setting up this Schedule, you should assign the most specific pricing rules the lowest Sequence numbers and the more general pricing rules a higher sequence number. For example, if you bill Employee 100 (who is assigned to Payroll Class 2000) at $90/hour and everyone else in Payroll Class 2000 at $75/hour, you need to assign a lower Sequence number to the pricing rule for Employee 100 than you would the pricing rule for Payroll Class 2000. It is recommended that you leave a gap between Sequence numbers (e.g., 100, 200, 300 etc.) so you can insert new rows as necessary to meeting new billing requirements.

Entry is required. No default.

Cost Type Code

Use the Cost Type field to establish labor pricing rule by Cost Type. A Cost Type is a major category of cost (e.g., field labor, home office labor).

PENTA displays the name/description of the Cost Type in the adjacent field.

Entry is optional. No default.

Low/High CC Mask

Use the Low CC Mask and High CC Mask fields to establish a labor pricing rule by Costcode.

Entry is optional. No default.

Payroll Class

Use the Payroll Class # field to establish a labor pricing rule for a group of employees.

Entry is required. No default.

Low/High Pay Rate #

Use the Low Pay Rate # and High Pay Rate # fields to further limit the employees the labor pricing rule applies to. This Pay Rate is a further breakdown of the Payroll Class (e.g., apprentice, journeyman, or supervisor).

This field is optional and only enterable if you entered a Payroll Class. No default.

Shift #

Use the Shift # field to limit the labor pricing rule to a particular work shift.

Entry is optional. No default.

Employee Id

If you did not enter a Payroll Class or Low Pay Rate #, use the Employee Id field to limit the labor pricing rule to a specific employee.

Entry is optional. No default.

Billable (Y/N)

Use the Billable field to indicate (with a Y for yes or an N for no) whether the pricing rule associated with the sequence is billable.

Entry is required. This field defaults as Y.

Temp Job Title

Use the Temporary Job Title field to override the employee's standard title information. This description appears on the labor support schedule.

Entry is optional. No default.

Markup Percents

  • Regular – Define a markup percentage for the regular portion or labor costs. PENTA marks up the regular portion of labor by this percentage.
  • Premium 1 – Define a markup percentage for the Premium 1 portion of labor costs. PENTA marks up the Premium 1 portion of labor by this percentage.
  • Premium 2 – Define a markup percentage for the Premium 2 portion of labor costs. PENTA marks up the Premium 2 portion of labor by this percentage.

These fields are optional and only enterable if you did not enter hourly rates. No default.

Hourly Rates - Regular

  • Regular – Define the hourly billing rate for the Regular hours.
  • Premium 1 – Define the hourly billing rate for the Premium 1 hours.
  • Premium 2 – Define the hourly billing rate for the Premium 2 hours.

These fields are optional and only enterable if you did not enter markup percents. No default.

Maximum Rates – Regular

  • If you entered markup percents, use the Regular field to limit the amount PENTA charges for regular labor hours. After increasing the regular hourly rate by the markup percentage, PENTA determines whether the marked-up rate exceeds the maximum rate here; if so, PENTA uses the maximum rate for calculating the billing amount.
  • If you entered markup percents, use the Premium 1 field to limit the amount PENTA charges for Premium 1 labor hours. After increasing the Premium 1 hourly rate by the markup percentage, PENTA determines whether the marked-up rate exceeds the maximum rate here; if so, it uses the maximum rate for calculating the billing amount.
  • If you entered markup percents, use the Premium 2 field to limit the amount PENTA charges for Premium 2 labor hours. After increasing the Premium 2 hourly rate by the markup percentage, PENTA determines whether the marked-up rate exceeds the maximum rate here; if so, PENTA uses the maximum rate for calculating the billing amount.

Entry in each field is optional. No default.

Taxable Frng %

Use the Taxable Fringe % field to markup taxable fringe cost by a certain percentage.

Entry is optional. No default.

Daily Subsist. Rate

Use the Daily Subsistence Rate field to enter the daily subsistence billing rate for a job.

This field supports your ability to bill subsistence (per diem) on job billings at a rate different from the cost rate.

Entry is optional. No default.

Other Pay %

Use the Other Pay % field to markup other pay cost entered on an employee's timecard by a certain percentage.

Entry is optional. No default.

Non-Tax Frng %

Use the Non-Tax Fringe % field to markup non-taxable fringe cost by a certain percentage.

Entry is optional. No default.

Reimbursement %

Use the Reimbursement % field to markup payroll reimbursements by a certain percentage.

Entry is optional. No default.

Salaried Billing Method

This controls how PENTA calculates the labor billing rate. You can bill employees using any of the following methods:

  • A (Annualized Salary) – You can bill salaried employees using any of the four methods. Using the H method, you must enter a billing rate per hour into the pricing schedule. With methods B or A, you can enter a Markup % in the Regular, Premium 1, or Premium 2 markup percent fields of the pricing schedule, and PENTA marks up the cost rate used to charge the job for the salaried employee’s time. With method J, enter a Markup % in the Cost Markup % field.

With this method, PENTA uses the cost rate (either their pay rate per hour or the standard charge rate per hour) used to charge the job plus the associated Markup % (Regular, Premium 1, or Premium 2) in the pricing schedules.

  • B (Base Salary Only) – Invoice using a Base Salary Rate. For salaried employees, PENTA calculates this as Annual Salary ÷ Salary Hours per Year.

You can enter a Regular, Premium 1, or Premium 2 Markup % in the Pricing Schedules. (This is the default.)

With this method, PENTA uses the cost rate (either their pay rate per hour or the standard charge rate per hour) used to charge the job plus the associated Markup % (Regular, Premium 1, or Premium 2) in the pricing schedules.

  • H (Hourly Rate) – Invoice using Hourly Rates for either salaried or hourly employees. You can enter a Regular, Premium 1, or Premium 2 billing rate per hour in the pricing schedule screens.

With this method, you enter a billing rate per hour, which is usually different from the employee's hourly pay rate, into the pricing schedule.

  • J (Job Cost) – Invoice the job based on actual cost (both salary and benefits) allocated for salaried employees. PENTA calculates invoices using an hourly rate as (Raw annual salary + Annualized benefits and direct burden) ÷ Annual salaried hours.

With this method, PENTA uses the cost rate (either their pay rate per hour or the standard charge rate per hour) used to charge the job plus the associated Markup % (Regular, Premium 1, or Premium 2) in the pricing schedules.

  • S (Period Salary/Hours Worked) – PENTA calculates the hourly billing rate as ((Period salary ÷ Distributed hours for period) * Cost Markup %). You can enter a maximum rate for Regular, Premium 1, or Premium 2 hours. If a maximum rate exists, the Invoicing Process compares the calculated billing rate to the maximum rate and uses the smaller of the two.

Entry is optional. No default.

Cost Markup%

Enter a markup percentage for method J (above). PENTA applies this % to the cost amount.

Entry is optional. No default.

Note: Do not use the Cost Markup % field for hourly employees or for methods H, B, or A.

Copy Schedules button

After you create a Schedule # and Description, clicking the Copy Pricing Schedules button launches the Copy Pricing Schedules pop-up window.

The Copy Pricing Schedules pop-up window allows you to copy rates and markups in effect on a specific date from another schedule or the current schedule. You can copy rates and markups to the new Schedule from a preexisting schedule or from a job.

Copy the rates/markups that were in effect on

Use the Copy the rates/markups that were in effect on field to enter the effective date of the schedule you wish to copy.

When you execute the copy, PENTA searches for a source record matching other copy criteria with an Effective Date equal to or prior to the date you enter here. PENTA copies the pricing rules from the source schedule.

Entry is required. This field defaults as the Effective Date you entered in the main window; however, you can override this default.

From Schedule #

Use the From Schedule# field to identify the standard pricing schedule you wish to copy pricing rules from when creating the new Schedule or effective date.

You must enter either a Schedule # or Job Id to execute a copy. No default.

Job Id

Use this field to enter a Job Id if you want to copy the pricing instructions from a job-specific set of pricing instructions.

To execute a copy, you must enter either a Job Id or a Schedule #. No default.

Effective Date Comments button

Clicking the Effective Date Comments button launches the Effective Date Comments pop-up window.

The Effective Date Comments pop-up window allows you to record notes regarding the rates for an effective date.

OT Hours Threshold button

Click the OT Hours Threshold button to launch the Overtime Hours Threshold pop-up window.

The Overtime Hours Threshold pop-up window allows you to define the point at which Premium 1 hours and Premium 2 hours begin within a pay period or day. PENTA uses this information for the following:

  • Determining when Premium hours for billing purposes begin.
  • Pricing these hours using the appropriate billing rate/markup percent.

Note: You can only enter threshold hours for a Pay Period or a Day; you cannot enter both.

Effective Date

This is the date when the Premium Hours Threshold information becomes effective.

You cannot edit this field; it is for display only. This field defaults from the Effective Date you entered in the main window.

Premium 1 Hours/Pay Period Threshold

Use this field to define the point (measured in hours per pay period) where Regular hours end and Premium 1 hours begin.

Premium 2 Hours/Pay Period Threshold

Use this field to define the point (measured in hours per pay period) where Premium 1 hours end and Premium 2 hours begin.

Premium 1 Hours/Day Period Threshold

Use this field to define the point (measured in hours per pay day) where Regular hours end and Premium 1 hours begin.

Premium 2 Hours/Day Period Threshold

Use this field to define the point (measured in hours per pay day) where Premium 1 hours end and Premium 2 hours begin.

Daily Threshold Overrides button

PENTA only enables this button if Premium Hours/Day Period Threshold exists.

Clicking the Daily Threshold Overrides button launches the Daily Hours Per Day Threshold Overrides pop-up window.

The Daily Hours Per Day Threshold Overrides pop-up window allows you to set Per Day Thresholds for Premium 1 and Premium 2 hours by day of the week. A value entered for a day of the week will override the default Per Day Hours Threshold.

For situations where all hours worked on a Saturday and/or Sunday are billed as overtime, you can enter 0.

Schedule Comments button

Clicking the Schedule Comments button launches the Schedule Comments pop-up window.

The Schedule Comments pop-up window allows you to record comments for a schedule. Use this window to describe when you should use this pricing schedule.

 

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