## Defining Dependent Contract Billing Lines

This chapter provides overviews of dependent contract billing lines and of prepayments for contracts, lists prerequisites, and discusses how to define contract billing lines for:

- Direct and rated draws

- Fees

- Components

- Applied burdens

- Labor burden

- Revenue

### Understanding Dependent Contract Billing Lines

This section lists common fields and discusses dependent contract billing lines.

#### Common Fields Used in This Chapter

Alternate Seq Code (alternate sequence code) | Enter a sequence number to display contract information in a sequence other than the default line number sequence.
Bill Suspend | Leave this field blank to add billing records to the Invoice Summary Work file (F4822) and bill the appropriate amounts. Enter 1 to add billing records to the work file but not bill any amounts. Enter 2 if you do not want to create billing records for the work file. Enter 3 to add billing records to the work file and ignore any not-to-exceed limits. Note. This field works with the NTE (not-to-exceed) field. The value in this field determines how the system handles a situation where the not-to-exceed (NTE) amount has been exceeded.
Billing AAI Control (billing automatic accounting instructions control) | Enter 0 to specify that the account information for a billing line identifies a revenue account. Enter 1 to specify that the account information for a billing line identifies a cost (source) account. The system automatically supplies the account information (business unit, object, subsidiary, subledger, and subledger type) from the automatic accounting instructions (system 52, code BC). You can also enter a specific account. All billing lines, with the exception of T and M, use the account information. Note. When this option is set to 1, the system processes the billing line against the Billing AAI Information table (F48S95) during journal generation. This is similar to how the system processes a T and M billing line. When the Journal Generation Control option in the Billing Constants program enables revenue recognition, and you leave this field blank, the system assigns a 1 to indicate that the account associated with this billing line is a cost account. When the Journal Generation Control option in the Billing Constants program does not enable revenue recognition, and you leave this field blank, the system assigns a 0 to indicate that the account associated with this billing line is a revenue account. When the Billing AAI Control field is set to 0 to indicate that the account associated with this billing line is a revenue account, taxes are included in the revenue amount if taxes are set on the contract.
Billing Line | Enter the pay item number as defined by the owner. This field is alphanumeric and can be up to 15 characters in length. We recommend that you use numeric information for this pay item number.
B L (billing line type) | Enter a code that specifies the billing terms that are defined by the billing line on the contract. The system uses the predefined codes for the billing line type to access formulas and other information related to the calculation of billing and revenue amounts for the billing line. If you leave the B L field blank, the system enters L for lump sum. The value entered in the B L field controls which fields are available.
Business Unit | Enter a business unit to identify a separate entity within a business for which you want to track costs. For example, a business unit might be a job, project, work center, or branch or plant. Business unit security can prevent you from locating business units for which you have no authority.
Change Date | Enter the date of last change for the change order. This date controls general ledger processing for the change order. If you leave the Change Date field blank, the system enters the current date. Note. For multicurrency contracts, the system uses the change date to retrieve the exchange rate for the contract.
Change Order | Enter the change number of the contract. If you leave this field blank, the system assigns the next available number. If this is the base order of a contract, the system assigns 000. For example, the base contract is the change order number 000, the first change order is 001, the second is 002, and so on.
Change Status | Enter a code from UDC 52/CH that indicates the change order status of a contract.
Contract No (contract number) | Enter the number that uniquely identifies this contract on the system. If you leave this number blank during contract entry, the system uses the Next Numbers facility (system 52, index 01) to assign the number.
Elig Ovr (eligibility override) | Enter a value to override the service billing constants eligibility code when records in the Billing Detail Workfile table (F4812) are created during invoicing. Values are: 0: Invoicing and Revenue 1: Invoicing Only 2: Revenue Only 3: Non-billable 4: Cost Only Leave this option blank if you do not want to override the eligibility code. When the Journal Generation Control option in the Billing Constants program (P48091) does not enable revenue recognition and you leave this field blank, the system assigns a 1 (Invoicing Only). When the Journal Generation Control option in the Billing Constants program enables revenue recognition and you leave this field blank, the system assigns blank (No Overrides); the billing line is eligible for invoicing and revenue.
G/L Offset | Enter the offset account for the contract line or pay item. The system automatically enters a default value from the accounts receivable offset for the Owner (Customer) Address Book. If you leave this field blank, the system uses the general ledger offset from the customer.
Obj Acct (object account) | Specify the object account portion of a general ledger account. The object account refers to the division of the cost code (for example, labor, materials, and equipment) into subcategories. For example, you can divide the cost code for labor into regular time, premium time, and burden. Note. If you use a flexible chart of accounts and the object account is set to six digits, we recommend that you use all six digits. For example, entering 000456 is not the same as entering 456 because if you enter 456 the system enters three blank spaces to fill a six-digit object.
Planned Comp (planned completion) | Enter the date that you plan to complete work on the contract.
Planned Start | Enter the date that you plan to start work on the contract.
Project/Job | Enter the number that identifies the project or job associated with this contract. You can set up projects or jobs in Job Cost. You can use the project or job number as a search criterion on the Contract Search form. If you leave this field blank, the system assigns the project from the contract master.
Reference | Enter the number used to correlate a base contract or change order with a budget change in Job Cost. The job budget change, which might be based on an owner change order, corresponds to the R2 (reference 2) field in the detail budget change journal records.
Retn Rule (retainage rule) | Enter a rule the system uses to calculate retainage on a contract. For example: Retn % - 10.00; Percent Complete - 50.00 Retn % - 5.00; Percent Complete - 95.00 This rule indicates that there is a 10 percent retainage until 50 percent of the job is complete. Then a 5 percent retainage is calculated for the next 45 percent of the job until 95 percent of the job is complete. Once 95 percent of the job is complete, retainage is no longer withheld.
Schedule of Values | Enter the expected or budgeted amount for the specific line item of the contract. The system uses this amount in conjunction with the percent of completion to calculate billing and retainage. The direct and rated draw billing lines reduce the billing amount. For these line types, you must enter a negative amount in the Schedule of Values field, such as -10,000.
Sub (subsidiary) | Enter the subsidiary portion of an object account. Subsidiary accounts include detailed records of the accounting activity for an object account. Note. If you are using a flexible chart of accounts and the object account is set to six digits, you must use all six digits. For example, entering 000456 is not the same as entering 456 because, if you enter 456, the system enters three blank spaces to fill a six-digit object.
Sub Type (subledger type) | Enter a code from UDC 00/ST that you use with the Subledger field to identify the category of the subledger.
Subledger | Enter the subledger portion of the account number. The subledger identifies a detailed, auxiliary account within a general ledger account. A subledger can be an equipment item number or an address book number. If you enter a subledger, you must also specify the subledger type.
Tax Rate | Enter a code to identify a tax or geographic area that has common tax rates and tax distribution. The tax rate or area must be defined to include the tax authorities (for example, state, county, city, rapid transit district, province) and their rates. To be valid, a code must be set up in the Tax Rate/Area table (F4008).
Terms Only | Enter Y to specify that this change affects contract terms other than price, such as an extension in time or a change in schedule. Enter N if this change does not affect terms.
Tx Ex (tax explanation) | Enter a code from UDC 00/EX to control how tax is assessed and distributed to the G/L revenue and expense accounts.
Vertex Prod. Cat. (Vertex product category) | Enter a user-defined code used in the Vertex Tax Decision Maker for products or services that are nontaxable or are at a nonstandard rate.
Vertex Trn. Type (Vertex transaction type) | Enter the sales and use transaction type from Vertex.

#### Dependent Contract Billing Lines

After you define contract master information, you must define contract billing lines to generate invoices for your client. Contract billing lines define the billing terms of the contract. You can set up independent and dependent billing lines on a contract. The billing line type determines whether the billing line is independent or dependent.

Dependent contract billing lines include only a portion of the information that the system needs to calculate a billing amount. To calculate a billing amount for a dependent contract billing line, you must associate each dependent billing line with an independent billing line. Typically, you set up dependent billing lines when you want to generate invoices that illustrate each element included in individual billing amounts.

### Understanding Prepayments for Contracts

Prepayments, or draws, are advance deposits that your company might require from the customer at the time they sign the contract. When you set up contract billing lines on a contract for prepayments, your company agrees to apply the amount of the prepayment against the total billing amount for the contract.

You can define contract billing lines for prepayments to specify billing terms for direct draws and rated draws.

Direct Draw

A direct draw is a fixed-amount reduction that you apply to the billing amount for the contract.

You apply the direct draw to the billing amount beginning with the first billing until the entire amount of the prepayment is fully applied to the contract

Rated Draw

A rated draw is a percentage reduction that you apply to the billing amount of the contract each time that you create an invoice for the contract. The percentage reduction is based on a percentage of the work completed for the job.

You apply the amount of the rated draw over the life of the contract. The entire amount of the prepayment is fully applied to the contract by the time the work for the contract is complete.

### Prerequisites

Before you complete the tasks in this section:

- Create a contract master for the contract.

  See Setting Up Contract Master Information.

- Set processing options for Contract Billing Line Details (P5202).

- Enter the contract billing lines that you want to cross-reference to a billing line.

- If you are creating a cross-reference to a fee line, define valid rate codes for the fee line.

### Defining Contract Billing Lines for Direct and Rated Draws

This section provides an overview of direct draw and rated draw billing lines and discusses how to:

- Define a billing line for a direct or rated draw.

- Define cross-references for a direct or rated draw.

#### Understanding Direct and Rated Draw Billing Lines

You define a contract billing line for a direct or rated draw to represent a prepayment or advance deposit that your company might require from the customer at the time they sign the contract.

When you define a direct or rated draw billing line, the system supplies the:

- Tax explanation, tax or geographical area, job, and accounts receivable company based on the contract master.

- Accounts receivable offset based on the customer of the contract.

- Revenue account based on the automatic accounting instruction BC06 for direct draw or BC07 for rated draw.

When you first define a direct draw billing line, the system displays this message, which you can ignore:

Warning - Cross-Reference Not Setup

Note. The system highlights the X Ref field until you define a cross-reference for the direct draw billing line.

Direct Draw Billing Lines

A direct draw represents a fixed-amount reduction that you apply to a contract. You define a dependent contract billing line for a direct draw. The dependent billing line reduces the billing amount of another billing line in the contract. To apply a direct draw billing line to a billing amount, you must define a cross-reference between the two billing lines.

You can define a cross-reference between direct draw billing lines and these contract billing lines:

- Unit price (independent)

- Lump sum (independent)

- Time and Material (independent)

- Milestone (independent)

- Progress (independent)

- Fee (dependent)

- Component (dependent)

You apply the reduction beginning with the first billing until the entire schedule of values for the draw is fully applied to the contract. The schedule of values for the direct draw is the amount of the prepayment. For example, assume that a direct draw is for -22,000 USD, and that the first three billings are for 10,000 USD each. The calculations for the billings occur in sequence:

10,000 Billing – 10,000 Direct Draw reduction = 0 Billing Amount

10,000 Billing – 10,000 Direct Draw reduction = 0 Billing Amount

10,000 Billing – 2,000 Direct Draw reduction = 8,000 Billing Amount

Rated Draw Billing Lines

A rated draw represents a percentage reduction that you apply to the billing amount of the contract each time that you create an invoice for the contract. The percentage reduction is based on a percentage of work completed for the job. You apply the amount of the rated draw over the life of the contract. The entire amount for the prepayment is fully applied to the contract by the time that the work for the contract is complete. The schedule of values amount for a rated draw is a negative amount. The amount represents a reduction to the total billing value for the contract.

You define a dependent contract billing line for a rated draw. The dependent billing line reduces the billing amount of another billing line in the contract. To apply a rated draw billing line, you must set up a cross-reference between the rated draw billing line and two or more billing lines.

You can set up cross-references between rated draw billing lines and these contract billing lines:

- Unit price (independent)

- Lump sum (independent)

- Milestone (independent)

- Progress (independent)

Rated draws usually relate to progress billing. After your company completes a specific percent of the job or project, the system calculates the current reduction amount with this formula:

(Schedule of Values) × (Percent Complete on the Cross Referenced Billing Line) = (Initial Billing Amount)

(Prepayment Amount) × (Percent Complete) = (Prepayment Reduction)

(Initial Billing Amount) – (Prepayment Reduction) = (Billing Amount)

You apply the reduction beginning with the first billing until the entire schedule of values for the draw is fully applied to the contract. The schedule of values for the rated draw is the amount of the prepayment.

For example, assume that a rated draw is for 5,000 USD, and the related progress billing is for 100,000 USD. You define the first billing event as 10 percent complete. When you complete the first billing event, the system applies the percentage of completion to the schedule of values for the progress billing and the rated draw.

The system calculates the billing amount as:

100,000 × .10 = 10,000 (Initial Billing Amount)

5,000 × .10 = 500 (Prepayment Reduction)

10,000 – 500 = 9,500 (Billing Amount after Reduction)

#### Forms Used to Define Contract Billing Lines for Direct or Rated Draws

Form Name | FormID | Navigation | Usage
Contract Billing Line Detail Revisions | W5202B | Daily Processing menu (G5210), Contract Billing Line Details Enter a contract number and click Add on the Work With Contract Billing Line Details form. | Define a billing line for a direct draw.
Draw Cross-Reference Revisions | W52161A | Select a direct or rated draw billing line on the Contract Billing Line Detail Revisions form, and then select Cross Reference from the Row menu. | Define cross-references for a direct or rated draw.

#### Defining a Billing Line for a Direct or Rated Draw

Access the Contract Billing Line Detail Revisions form.

B L (billing line type) | Enter D or 8 for direct draw billing lines. Enter R or 9 for rated draw billing lines.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.
If you leave the account number (business unit, object, and subsidiary) blank, the system assigns the account number (business unit, object, and subsidiary) from the AAIs that are set up for item BC06 for direct draw billing lines or for item BC07 for rated draw billing lines.

#### Defining Cross-References for a Direct or Rated Draw

Access the Draw Cross-Reference Revisions form.

On the Draw Cross-Reference Revisions form, select the contract billing lines that you want to cross-reference to this direct or rated draw line, and then select Select/Delete from the Row menu. The system enters an X in the X Ref column.

### Defining Contract Billing Lines for Fees

This section provides an overview of fee billing lines, lists a prerequisite, and discusses how to:

- Define a contract billing line for a fee.

- Define a cross-reference for a fee.

#### Understanding Fee Billing Lines

A fee represents an amount for which you want to bill the customer in addition to another billing amount. You can define fees based on the billed amount for another billing line in a contract. To do this, you define dependent contract billing lines for fees.

Contract billing lines for fees depend on other billing lines for their calculation. To calculate billing amounts for a fee billing line, you must set up a cross-reference between the fee billing line and the other billing lines within the contract. You must also assign a rate code or a fee percentage to the billing line for a fee. The rate code specifies a table for fee percentages that the system uses for a fee billing line. The rate code is based on an effective date rate.

To apply a fee to a contract, you must set up a cross-reference between the dependent fee billing line and other billing lines within the contract against which you want to apply the fee. You can also set up cross-references to other fee billing lines, thereby creating a compound fee calculation.

When you create invoices, the system uses either the invoice amount or the cost amount to calculate the fee amount. For example,

(Fee Amount) = (Fee Percent) × (Total Invoice Amount for the Billing Lines)

Defining Fees for Billing Amounts

You can define dependent contract billing lines for fees. Fees represent an amount that you bill customer in addition to the billed amount for one or more contract billing lines. You can base the contract billing line for a fee on a percent of either the costs incurred or the amounts invoiced for a contract.

When you define a fee billing line, the system supplies the:

- Tax explanation, tax or geographical area, job, and accounts receivable company, based on the contract master.

- Accounts receivable offset, based on the customer of the contract.

- Revenue account, based on the AAI BC03 for fees.

#### Prerequisite

Set up a fee table.

See Setting Up Fees.

#### Forms Used to Define Contract Billing Lines for Fees

Form Name | FormID | Navigation | Usage
Contract Billing Line Detail Revisions | W5202B | Daily Processing (G5210), Contract Billing Line Details Enter a contract number and click Add on the Work With Contract Billing Line Details form. | Define a contract billing line for a fee.
Fee Cross Reference Details | W5213A | Select a fee billing line on the Contract Billing Line Detail Revisions form, and then select Cross Reference from the Row menu. | Define a cross-reference for a fee.
Select Cross Reference Lines | W5213B | Select Select Lines from the Form menu on the Fee Cross Reference Details form. | Select contract billing lines to cross-reference to a fee.

#### Defining a Contract Billing Line for a Fee

Access the Contract Billing Line Detail Revisions form.

B L (billing line type) | Enter F, 4, or A for fee billing lines.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.
If you leave the account number (business unit, object, and subsidiary) blank, the system assigns the account number (business unit, object, and subsidiary) from the AAIs that are set up for item BC03.

#### Defining a Cross-Reference for a Fee

Access the Fee Cross Reference Details form.

Note. To define a cross-reference for a fee line that is associated with project and government contract accounting (PGCA) contract, select the Project and Government tab.

See Setting Up Fee Billing Lines for PGCA Contracts.

To define a cross-reference for a fee:

1. Enter a markup percentage or a rate code, but not both.

   Rate codes are set up for incremental fee markup percentages that are date-sensitive.

2. Click either Invoice/Revenue or Cost in the Fee Basis group box.

   If the Inv/Rev Amounts Must Equal option is selected on the Service Billing Constants form, you must select Invoice/Revenue as the fee basis.

   If the fee basis is cost, the fee billing line must cross-reference T and M billing lines only.

3. Select Select Lines from the Form menu to access the Select Cross Reference Lines form.

4. Select one or more of the contract billing lines, and then select Select Records from the Row menu.

   When a contract billing line is selected, it is removed from the form.

5. Click Cancel to return to the Fee Cross Reference Details form.

6. Click Find on the Fee Cross Reference Details form.

   The system displays the contract billing lines that you have selected as the basis for the fee billing line calculation.

Markup | Specify the percent of markup that you want the system to use when it calculates the billing amounts for fee lines for owner pay items. You enter either a percent in this field or a rate code in the Rate Code field. Enter the percentage as a whole number. For example, you enter 10 percent as 10.
Rate Code | Enter the rate code used in Contract Billing for owner pay items that are fee-based lines. By defining a specific rate code, you have the ability to set up date sensitive fee percentages.
Invoice/Revenue | Select this option to use the invoice amount as the fee basis to derive the billing amount for the fee line.
Cost | Select this option to use the cost amount as the fee basis to derive the billing amount for the fee line.

### Defining a Contract Billing Line for Components

This section provides an overview of component billing lines, lists prerequisites, and discusses how to:

- Define a billing line for a component.

- Define cross-references for a component.

#### Understanding Component Billing Lines

A component is a markup amount that you link to an independent billing line for time and materials or to a dependent billing line for burden. The billing amount for components is associated with the billing lines that you set up for time and materials.

To display the component amounts that are associated with billing lines for time and materials as a separate line on the invoice for the contract, you must set up a billing line for components. Setting up a separate billing line for components enables you to set characteristics for the component billing line that differ from the base record.

For example, when you set up a billing line for time and materials to calculate the billing amount for payroll costs, the amount includes a component markup of 10 percent for overhead. Because you have agreed to bill the client for the overhead separately from the payroll costs, you enter a billing line for a component to separate the payroll and overhead amounts.

When you define billing lines for components, the system automatically supplies the information for the job and the accounts receivable company based on the contract master. In addition, if you don't need to display component billing lines separately from time and material billing lines, you can include component amounts in time and material billing lines by having the system calculate component amounts.

See Adding Component Rules to Existing Markup Rules.

When you first define a contract billing line for a component, the system displays this message, which you can ignore:

Warning - Cross-Reference Not Setup

Note. The system highlights the X Ref field until you define a cross-reference for the component billing line.

Cross-References for Components

After you set up contract billing lines for components, you must complete these tasks:

- Set up a cross-reference from the billing line to a component code.

  The component code specifies the rules for the markup calculation.

- Set up a cross-reference from the component billing line to an independent billing line for time and material or to a dependent billing line for burden that you have previously defined for the same contract.

When you create invoices or generate revenue recognition, the system uses the cross-reference information to separate the component markup from the time and materials billing line.

Important! If you do not set up the correct cross-references for the previously defined billing line for time and materials, the system does not separate the component and time and material amounts when you generate invoices.
If you change a cross-reference after generating the workfile, you must run the Workfile Re-extension program (R481202) to apply the changes to workfile transactions.

#### Prerequisites

Before you complete the tasks in this section:

- Define billing lines for time and material for the contract.

  See Defining Contract Billing Lines for T and M or Cost Plus.

- Set up component markup rules for component codes.

  See Setting Up Component Rules.

#### Forms Used to Define Contract Billing Lines for Components

Form Name | FormID | Navigation | Usage
Contract Billing Line Detail Revisions | W5202B | Daily Processing menu (G5210), Contract Billing Line Details Enter a contract number and click Add on the Work With Contract Billing Line Details form. | Define a billing line for a component.
Component Billing Line Cross-Reference Revisions | W5214A | Select a component billing line on the Contract Billing Line Detail Revisions form, and then select Cross Reference from the Row menu. | Define cross-references for a component.
Component Billing Line Cross-Reference Selection | W5214B | Select a row in the detail area of the Component Billing Line Cross-Reference Revisions form that contains a component code, and then select Cross Reference from the Row menu. | Select the time and materials billing line to which you want to cross-reference a component.

#### Defining a Billing Line for a Component

Access the Contract Billing Line Detail Revisions form.

B L (billing line type) | Enter C or 5 for component billing lines.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.

#### Defining Cross-References for a Component

Access the Component Billing Line Cross-Reference Revisions form.

To define cross-references for a component:

1. Complete the Component Code field to cross-reference the billing line to a component code, and then click OK.

   The system enters an X in the X Ref column for the component line on the Contract Billing Line Detail Revisions form.

2. Access the Component Billing Line Cross-Reference Revisions form again to set up a cross-reference from the component billing line to an independent billing line for time and material.

3. Select the row in the detail area that contains the component code, and then access the Component Billing Line Cross-Reference Selection form.

4. Select the time and materials billing line to which you want to cross-reference the component, and then select Select Billing Line from the Row menu.

   The system enters an X in the X Ref column for the billing line that you selected.

### Defining a Contract Billing Line for Applied Burdens

This section provides an overview of billing lines for applied burdens and discusses how to:

- Define a billing line for applied burdens.

- Define cross-references for applied burdens.

- Select cross-reference lines for the applied burdens line.

#### Understanding Billing Lines for Applied Burdens

Billing lines for applied burdens are similar to billing lines for components and enable you to separate the applied burden amounts that are associated with T and M or cost plus billing lines from the base records for invoicing and revenue recognition for the contract. You also use applied burden billing lines to calculate other billing lines, such as fees, based on burdened amounts separately from the T and M or cost plus billing line.

To set up billing lines for applied burdens, you complete these steps:

1. Set up a billing line using line type G.

2. Enter the burden category of the applied burden amount that you want to separate from the base record.

3. Select existing T and M or cost plus billing lines to cross-reference to the applied burden billing line.

When you define billing lines for applied burdens, the system automatically supplies the information for the job and the accounts receivable company based on the contract master.

When you first set up a contract billing line for applied burdens, the system displays this message, which you can ignore:

Warning - Cross Reference Not Setup

Note. The system highlights the X Ref field until you define a cross-reference for the applied burden billing line.

Note. If you do not set up the correct cross-references for the previously defined T and M and cost plus lines, the system does not separate the applied burden and T and M or cost plus amounts when you generate invoices.
If you change a cross-reference after generating the workfile, you must run the Workfile Re-extension program (R481202) to apply the changes to workfile transactions.

See Also

Setting Up Burdening

Processing Burdening

#### Prerequisites

Before you complete the tasks in this section:

- Define T and M and cost plus billing lines for the contract.

  See Defining Contract Billing Lines for T and M or Cost Plus.

- Set up burden categories.

  See Understanding Segments and Burdening Categories.

#### Forms Used to Define Billing Lines for Applied Burdens

Form Name | FormID | Navigation | Usage
Contract Billing Line Detail Revisions | W5202B | Daily Processing menu (G5210), Contract Billing Line Details Enter a contract number and click Add on the Work With Contract Billing Line Details form. | Define a billing line for applied burden.
Applied Burden Billing Line Cross-Reference Revisions | W5214A | Select a T and M or cost plus billing line on the Contract Billing Line Detail Revisions form, and then select Cross Reference from the Row menu. | Define cross-references for applied burden.
Applied Burden Billing Line Cross-Reference Selection | W5214B | Select an existing burden category on the Applied Burden Billing Line Cross-Reference Revisions form and select Cross Reference from the Row menu. | Select T and M or cost plus lines to cross-reference to the applied burden billing line. Note. You must click OK and then click Cancel on the Applied Burden Billing Line Cross-Reference Revisions form before you can select Cross Reference from the Row menu.

#### Defining a Billing Line for Applied Burdens

Access the Contract Billing Line Detail Revisions form.

B L (billing line type) | Enter G for applied burden billing lines.

#### Defining Cross-References for Applied Burdens

Access the Applied Burden Billing Line Cross-Reference Revisions form.

1. Enter the burden category for which you want to separate out amounts for invoicing or revenue recognition.

2. Click OK.

3. Click Cancel.

#### Selecting Cross-Reference Lines for the Applied Burdens Line

Access the Applied Burden Billing Line Cross-Reference Selection form.

1. Select the lines to which you want to cross-reference the burden category and select Select Billing Ln from the Row menu.

   The system displays an X in the X Ref field to indicate that the T and M or cost plus line has been cross-referenced to the applied billing line.

2. Click Cancel.

### Defining a Contract Billing Line for Labor Burden

This section provides an overview of labor burden billing lines, lists prerequisites, and discusses how to:

- Define a billing line for labor burden.

- Define cross-references for labor burden.

#### Understanding Labor Burden Billing Lines

Labor burden is the cost that a company incurs as a result of employing people. You link labor burden transactions to a billing line for labor. The billing amount for labor burden is included in the billing lines that you set up for labor.

To display the labor burden amounts that are included in billing lines for labor as a separate line on the invoice for the contract, you must set up a billing line for labor burden. Setting up a separate billing line for labor burden enables you to specify characteristics for the labor burden billing line that differ from the base record.

For example, assume that when you set up a billing line for labor to calculate the billing amount for payroll costs, the amount includes a labor burden transaction for company-paid payroll taxes. Because you have agreed to bill the client for the taxes separately from the payroll costs, you enter a billing line for labor burden to separate the payroll and burden amounts.

Note. You must set up the PDBA or tax type for labor burden for each employee.

See Entering Employee Deduction, Benefit, and Accrual Instructions.

When you define billing lines for labor burden, the system automatically supplies the information for the job and the accounts receivable company based on the contract master.

If you don't need to print labor burden billing lines separately from labor billing lines on the invoice, you can include labor burden amounts in labor billing lines by having the system calculate labor burden when you create payroll journal entries.

When you first define a contract billing line for labor burden, the system displays this message:

Warning - Cross-Reference Not Setup

Note. The system highlights the X Ref field until you define a cross-reference for the labor burden billing line.

Cross-References for Labor Burden

After you set up contract billing lines for labor burden, you must set up:

- A cross-reference from the billing line to DBA or tax type.

  The DBA or tax type is used to calculate the burden amount.

- A cross-reference from the labor burden billing line to an independent billing line for labor that you have previously defined for the same contract.

When you create invoices or generate revenue recognition, the system uses the cross-reference information to separate the labor burden from the labor billing line.

Important! If you do not set up the correct cross-references for the previously defined billing line for labor, the system does not separate the labor burden and labor amounts when you generate invoices.
If you change a cross-reference after generating the workfile, you must run the Workfile Re-extension program (R481202) to apply the changes to workfile transactions.

#### Prerequisites

Before you complete the tasks in this section:

- Define billing lines for time and material for the contract.

  See Defining Contract Billing Lines for T and M or Cost Plus.

- Set up a DBA or a tax type for the burden.

  See Setting Up Deductions, Benefits, and Accruals.

  See Setting Up Tax Information.

#### Forms Used to Define Contract Billing Lines for Labor Burden

Form Name | FormID | Navigation | Usage
Contract Billing Line Detail Revisions | W5202B | Daily Processing menu (G5210), Contract Billing Line Details Enter a contract number and click Add on the Work With Contract Billing Line Details form. | Define a billing line for labor burden.
Burden Billing Line Cross-Reference Revisions | W5214A | Select a burden billing line on the Contract Billing Line Detail Revisions form, and then select Cross Reference from the Row menu. | Define cross-references for labor burden.
Burden Billing Line Cross-Reference Selection | W5214B | Select a row in the detail area of the Burden Billing Line Cross-Reference Revisions form that contains a burden DBA or tax type, and then select Cross Reference from the Row menu. | Select the labor billing line to which you want to cross-reference labor burden.

#### Defining a Billing Line for Labor Burden

Access the Contract Billing Line Detail Revisions form.

B L (billing line type) | Enter B or 0 for burden billing lines.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.

#### Defining Cross-References for Labor Burden

Access the Burden Billing Line Cross-Reference Revisions form.

To define cross-references for labor burden:

1. Complete either the DBA Code or Tax Type field to cross-reference the billing line to a DBA or tax type, and then click OK.

   The system enters an X in the X Ref column for the labor burden billing line on the Contract Billing Line Detail Revisions form.

2. Access the Burden Billing Line Cross-Reference Revisions form again to set up a cross-reference from the labor burden billing line to an independent billing line for labor.

3. Select the row in the detail area that contains the burden DBA or tax type, and then access the Burden Billing Line Cross-Reference Selection form.

4. Select the labor billing line to which you want to cross-reference the labor burden, and then select Select Billing Line from the Row menu.

   The system enters an X in the X Ref column for the billing line that you chose.

DBA Code | Enter a code that defines the type of pay, deduction, benefit, or accrual. Pay types are numbered from 1 to 999. Deductions and benefits are numbered from 1000 to 9999.
Tax Type | Enter a code from UDC 07/TX that specifies the type of payroll tax being processed. To set up state minimum wage amounts, you must enter MW in this field. To do so, you must first add MW to UDC 07/TX. However, you should not change the codes and definitions that are provided with the software.

### Defining Revenue-Only Contract Billing Lines

This section provides an overview of revenue-only contract billing lines, lists a prerequisite, and discusses how to define:

- Revenue billing lines for percent complete.

- Revenue billing lines for percent of billing.

- Cross-references for revenue billing lines.

#### Understanding Revenue-Only Contract Billing Lines

In addition to calculating revenue from existing billing lines, you can also set up revenue-only billing lines, which are additional billing lines that the system uses only for calculating revenue for a contract. You can define these two types of revenue-only billing lines:

- Percent complete (billing line type E).

- Percent of billing (billing line type H).

Percent complete billing lines enable you to recognize revenue for a percentage of the schedule of values for a contract. When you set up percent complete lines, you specify a percentage, and then enter an amount in the Schedule of Values field. When you run the Journal Generation program (R48132), the system multiplies this percentage by the schedule of values amount to calculate the revenue amount.

Percent of billing lines enable you to recognize revenue for a percentage of the cumulative billed amount. To set up percent of billing lines, you specify a percentage. When you run the R48132 program, the system multiplies this percentage by the cumulative billed amount (cost + fee + award fee amounts) to calculate the revenue amount.

After you set up a revenue-only billing line, you must define cross-references for the line. Cross-references define the billing lines for which you have already recognized revenue for a contract, so that you don't inflate revenue amounts.

You use the Revenue Billing Line Cross Reference program (P5217) to specify which lines are to be included in the revenue calculation, and the system stores these cross-references in the Revenue Billing Line Cross Reference table (F5217). When you run the Contract Revenue Workfile Generation program (R52120), the system creates placeholder transactions in the Billing Detail Workfile table (F4812) for the revenue billing lines. When you run the G/L Journal Generation program (R48132). the system performs the following actions to calculate the revenue amount:

1. Retrieves the cross-reference information from the F5217 table.

2. Retrieves the revenue percent, schedule of values, revenue status, and whether to include excess lines from the F5202 table.

For percent complete revenue lines, the system then performs these actions:

1. Retrieves the previous revenue amounts for the billing lines that are cross-referenced to the revenue line from the F4812 and the F4812H tables.

2. Determines whether to include excess lines, and if so, includes them.

3. Calculates the revenue amount by multiplying the percent complete by the schedule of values and then subtracting the previous revenue amount.

For percent of billing revenue lines, the system performs these actions:

1. Retrieves the previously billed amounts for the billing lines that are cross-referenced to the revenue line from the F4822 table and retrieves the previous revenue amounts for the billing lines that are cross-referenced to the revenue line from the F4812 and the F4812H tables.

2. Determines whether to include excess lines, and if so, includes them.

3. Calculates the revenue amount by multiplying the percent complete by the billed amount and then subtracting the previous revenue amount.

See Also

Recognizing Revenue

#### Prerequisite

Before defining revenue billing lines, you must set up these AAIs with valid revenue accounts:

- BC08: Revenue account for percent complete lines.

- BC09: Revenue account for percent of billing.

See Understanding Billing AAIs for Contracts.

#### Form Used to Define Contract Billing Lines for Revenue

Form Name | FormID | Navigation | Usage
Work With Contract Billing Line Details | W5202A | Daily Processing (G5210), Contract Billing Line Details Daily Processing-Project and Government Contract Accounting (G5215), Contract Billing Line Details | Review existing billing lines for a contract, or access the Contract Billing Line Detail Revisions form.
Contract Billing Line Detail Revisions | W5202B | Enter a contract number on the Work With Contract Billing Line Details form, click Find, and then click Select. | Define revenue-only contract billing lines.
Revenue Billing Line Cross Reference | W5217A | Enter a revenue billing line, click OK, and select Cross Reference from the Row Menu on the Contract Billing Line Detail Revisions form. | Set up cross-references for revenue billing lines.

#### Defining Revenue Billing Lines for Percent Complete

Access the Contract Billing Line Detail Revisions form.

BL (billing line) | Enter E to define a percent of billing revenue line. If you are defining billing lines for a contract that you entered in the Create/Edit Project and Government Contracts program (P52G01M), the system generates a warning if the billing line type does not match the revenue method on the funding level contract.
Schedule of Values | Enter the amount that you expect to bill, which is typically the funded amount for the funding level contract.
Rev % Cmpl (revenue percent complete) | Enter the percentage used for revenue calculation. The system calculates revenue by multiplying this percentage by the schedule of values, less any previously recognized revenue.
Rev Elig Status (revenue eligibility status) | Select a value from user-defined code table 52/RE to indicate the eligibility status for revenue generation. You complete this field only on revenue billing lines. Values are: Blank: The revenue billing line is a recurring line. O: The revenue billing line occurs one time only. S: The revenue billing line is suspended. These values are hard-coded.
Inc Excess Lines (include excess lines) | Enter Y or 1 to indicate that excess billing lines (lines created for amounts that exceed contract limits) should be included in revenue calculations. You can include excess billing lines in revenue calculations by using this flag or by selecting the excess billing line in the Revenue Billing Line Cross Reference program (P5217). If you enter N or 0, the system does not include excess lines in the revenue calculation.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.
If you leave the account number (business unit, object, and subsidiary) blank, the system assigns the account number using the AAIs that are set up for item BC08.

#### Defining Revenue Billing Lines for Percent of Billing

Access the Contract Billing Line Detail Revisions form.

B L (billing line) | Enter H to define a percent of billing revenue line. If you are defining billing lines for a contract that you entered in the Create/Edit Project and Government Contracts program (P52G01M), the system generates a warning if the billing line type does not match the revenue method on the funding level contract.
Rev % Cmpl (revenue percent complete) | Enter the percentage to use for revenue calculation. The system calculates revenue by multiplying this percentage by the cumulative billed amount, less retention.
Rev Elig Status (revenue eligibility status) | Select a value from user-defined code table 52/RE to indicate the eligibility status for revenue generation. You complete this field only on revenue billing lines. Values are: Blank: The revenue billing line is a recurring line. O: The revenue billing line occurs one time only. S: The revenue billing line is suspended. These values are hard-coded.
Inc Excess Lines (include excess lines) | Enter Y or 1 to indicate that excess billing lines (lines created for amounts that exceed contract limits) should be included in revenue calculations. You can include excess billing lines in revenue calculations by using this flag or by selecting the excess billing line (line type X ) in the Revenue Billing Line Cross Reference program (P5217). If you enter N or 0, the system does not include excess lines in revenue calculations. If you want to include excess lines in future revenue calculations, you must manually cross-reference the excess billing line.

Note. If you leave the Tax Rate and Tx Ex fields blank, the system uses the tax information from the contract master.
If you leave the account number (business unit, object, and subsidiary) blank, the system assigns the account number using the AAIs that are set up for item BC09.

#### Defining Cross-References for Revenue–Only Billing Lines

Access the Revenue Billing Line Cross Reference form.

The system displays all applicable billing lines. Select the lines, including the existing revenue line, that you want to use for calculating revenue, and click the Add Xref Line button. The system adds a record for each line that you select to the F5217 table. If you select a line and click the Remove Xref Line, the system removes the line from the F5217 table.