Costpoint updates the Open Billing Detail for projects with cost-based formulas.

Cost-based formulas include: Cost Plus Fee on Cost and Cost Plus Fee on Hours.

For cost-based formulas, values for each transaction are evaluated in the following manner:

1. On the Setup Information tab of the Manage Project Billing Information screen, you can select the Allow Transactions To Be Partially Billed check box if you would like to bill partial transactions. Clear this check box if you only want to bill transaction totals. If transactions cannot be partially billed, then, for each transaction, the Write Off and Hold amounts are summarized in Open Billing Detail. This summary amount is compared to the transaction amount. If the transaction amount is greater than the sum of those fields, the difference is the amount of this transaction eligible for billing.
2. The second option is Allow Transactions To Be Partially Billed. If this check box is selected on the Setup Information tab of the Manage Project Billing Information screen, partial transactions are also taken into consideration when arriving at allowable costs. Values for partial transactions are evaluated in the following manner:

   The Write Off, Hold, and Previously Billed amounts are summarized on the Manage Open Billing Detail screen. If the transaction amount is greater than the sum of those fields, the difference is the amount of this transaction eligible for billing.  If a write-off or hold amount was entered on the Manage Open Billing Detail screen, the amount to bill displays in the Amount to Bill field. If amount Amount on Hold or Write Off Amount was not entered, the Amount to Bill is zero, and the Transaction Amount is used by the Calculate Standard Bills screen.

   You can set cost ceilings at the summary or detail account level, or at multiple project levels. Only ceilings set at project levels equal to or lower than the level of the invoice project ID are observed, however. For example, you set up a three-level contract. The project is billed at the second level, and costs are charged at the third level. Ceilings set at the second or third level are observed when allowable costs are determined for billing purposes. However, ceilings set and costs incurred at level one of the project are ignored.

3. The program must calculate allowable costs. To determine allowable costs, the program sums eligible billing amounts in Open Billing Detail by Project/Org/Account combination. The program compares cost ceilings set by account to Inception-to-Date (ITD) amounts billed on the Manage Project Bill Summary screen. Cost ceilings with a ceiling code value of B or A are observed. The excess of ceiling amounts over amounts billed is the amount remaining to bill. The program compares this amount to the sum of currently billable transactions. If the transactions currently billable are less than the ceiling, all transactions are billed. If transactions exceed the cost ceiling, the program uses the following equation to determine which are allowable:

   The program first looks at the fiscal year, period, and subperiod in which each cost was incurred. Costs incurred are allowed from earliest to latest subperiod incurred. For example, assume that the Open Billing Detail contains unbilled costs from 1995, periods 1, 2, 3, and 4. Costs are evaluated from period 1 first in the determination of allowable costs. Costs incurred in period 4 are evaluated last.

   However, there may be situations where a ceiling is reached in the middle of a subperiod. Within a given fiscal year, period, and subperiod, costs are next evaluated based on transaction amount. Costs are allowed in ascending transaction amount. Therefore, smaller transaction amounts are considered before larger ones. Assume a cost ceiling was reached in period 4, subperiod 1. The program evaluates transactions within this subperiod based on amount. Transactions from smallest to largest are allowed until the ceiling is reached.

   If you are partially billing transactions, a partial transaction may be allowed to arrive at a cost ceiling. Therefore, part of a transaction may be considered billable, and part of it may be considered over ceiling. In this situation, the billable amount copied into Billing Edit Detail is reduced by the portion of the transaction that has been disallowed. If partial transactions are not billed, the entire transaction being evaluated at the time the ceiling is reached is disallowed.

   Allowable costs are determined before transaction updates to the Billing Edit Detail table. In other words, transactions are summed and evaluated in Open Billing Detail against cost ceilings. If transactions are partially billed, fully allowable transactions are copied into Billing Edit Detail. If only part of a transaction is allowable, only that portion is copied into Billing Edit Detail. Transactions over ceiling remain in Open Billing Detail. If transactions are not partially billed, the entire transaction used to arrive at the cost ceiling is disallowed and, therefore, is not copied into Billing Edit Detail.

   Additional fields are then updated in Billing Edit Detail. Write off amounts, and amounts on hold, are also copied into Billing Edit Detail. Therefore, for every billable transaction, Billing Edit Detail stores the part of that transaction that has been previously billed, written off, placed on hold, or is currently billed. The sum of these fields is the total transaction amount. The project ID that incurred the transaction and the invoice project ID, or project level to which the invoice is posted, are both stored for each transaction.

4. The program updates Billing Edit Detail with non-transaction-based amounts. These amounts include burdens, fee, fee over ceiling, costs over ceiling, and retainage amounts.
   • Burden: Burden amounts are the first non-transaction cost element calculated. The program groups allowable costs (and hours, if hours-based pools exist) by Project/Org/Account/FY/Period and Subperiod. It multiplies these allowable costs/hours by the provisional rate on the Pool Rates subtask of the Manage Cost Pools screen. The burden amounts are stored by Project/Org/Account/FY/Period/Subperiod and pool numbers in the Billing Edit Detail table. If burden ceilings exist for billing purposes, they are taken into consideration as part of this calculation. Burden ceilings are set by project, fiscal year, account and pool. If burden ceilings are set for billing purposes, they contain a ceiling code of B or A. The program compares the provisional rate to the burden ceiling rate. It multiplies the lower of the rates by the transaction amounts to arrive at a burden amount. It then adds a record to the Billing Edit Detail for burden amounts. It adds a record for each Project/Org/Account/FY/Period and Pool.
   • Fee: Next, the program calculates fee amounts. Fee calculations and updates occur in two phases. The program first calculates fee for direct costs. Once allowable costs have been determined, fee is applied. The program uses the fee percentage from the billing formula as the initial starting point when determining a fee rate. Next, fee overrides are taken into consideration. Fee overrides are set by account for both direct and burden costs. The program observes this override when computing billings if the override contains a ceiling code of B or A, Overrides may increase or decrease fee calculations.

     Once the fee rate is determined, the program multiplies it by the sum of transactions to arrive at a billable fee amount. Records are added to the Billing Edit Detail table for fee on direct costs. The records are grouped by Project/Org/Account/ FY/Period and Subperiod. The second phase of the calculation involves the calculation of fee on burden costs. If you have set a fee override for a given cost pool, the program uses the fee override rate to determine fee amounts on burden costs for that pool.

     However, fee overrides set on direct accounts are also taken into consideration in the calculation of fee on associated burdens. For example, fee on direct travel costs is limited to 2%. Assume that travel costs are burdened with G&A. The fee calculated on the G&A applied to that travel is also limited to 2%.

     Therefore, a situation may exist where a fee override percentage is set for a cost pool, but another override may be set for an element of that cost pool. In this instance, the override that applies a lower fee rate is used. For example, you set a fee override on the G&A pool of 3%. You set a cost fee override on travel accounts of 2%. Travel is burdened with G&A. In this instance, travel and its associated burdens (G&A) have been identified with a fee override percent of 2%. However, G&A has additionally been identified with a fee override of 3%. The program applies the lower of the two fee overrides (2%).

     Once the fee rate is determined, the program multiplies it by the burden amount to arrive at a billable fee amount per pool. Records are added to the Billing Edit Detail for fee on burden costs. These records are grouped by Project/Org/Account/ FY/Period/Subperiod and Pool number.

   • Fee Over Ceiling and Costs Over Ceiling: Next, the program applies total contract fee ceilings for both contract and funded values. Contract and funded fee ceilings are set on the Manage Total Ceilings screen. If the ceiling amount has a code of B or A, the program uses the ceiling for billing purposes. The fee calculated on the current invoice is combined with the fee billed to date on the Manage Project Bill Summary screen to obtain the Inception-to-Date (ITD) fee. If the total ITD fee computed exceeds the fee ceiling, the program will add a record to the Billing Edit Detail for over fee ceiling amounts. This record reduces the invoice by the amount over ceiling. The record is inserted into the Billing Edit Detail table at the level of the project where the ceiling was placed. Please note that the ceiling will be taken into consideration only if it is placed at or below the billing level of the project. The program adds allowable fee to allowable direct costs and burdens to arrive at a current billable amount. ITD amounts billed are summed on the Manage Project Bill Summary and added to current billable amounts. The program compares this amount to the Contract Value and Funded Value ceilings set up on the Manage Total Ceilings screen. If the amount has a ceiling code of B or A, the program uses this value as a total billing ceiling amount. If the total billing computed exceeds the billing ceiling, the program adds a record to the Billing Edit Detail for over ceiling total amounts. These ceilings are evaluated only if they have been placed at or below the billing level. The over ceiling records are inserted into the Billing Edit Detail table at the level of the project where the ceiling was placed.
   • Retainage Amounts: The final step is to calculate retainage amounts. Retainage is an amount that is withheld from the billing by an arrangement with the customer. It is usually stated in the form of a percentage of the contract or funded value. Retainage can be calculated on fee amounts, T&M labor, or billing amounts. For cost-based invoices, retainage must be calculated on fee or billing amounts. Additionally, retainage can be withheld on each invoice, or from the final invoice. You enter the formula and percentage used in retainage calculations on the Manage Project Billing Information screen at the Invoice Project level. A record is added to Billing Edit Detail for the retainage amount. This record is added at the Invoice Project level.