Material Rate Hierarchy - Customer/Job Work Orders

When capturing materials on customer and job work orders, the system uses a specific hierarchy to determine the markup and discount rates to use for calculating billable rates.

The following explains how the system derives billable rates for work completed inventory and work completed purchase lines on customer work orders based on your material rates setup.
  1. Service Site Overrides - The system first checks for a material override in SM Override Category Material for the service site specified on the work order. If a record is found for the specified material, the system uses the material's rate Basis and Break Points By option to determine the cost used in billable rate calculations.
    • Actual Cost - For Inventory lines, this will be the Actual Cost from the work completed line (if Break Points By is Total Cost) or the Cost Rate (if Break Points By is Unit Cost). For Purchase lines, this will be the Proj Cost from the work completed line (if Break Points By is Total Cost) or the Cost Rate (if Break Points By is Unit Cost).
    • Standard Cost - For Inventory and Purchase lines where Break Points By is Total Cost, this will be the Std Unit Cost from IN Location Materials (Inventory lines) or HQ Materials (Purchase lines) times the material quantity. If the line's UM does not match the material's standard UM, the system will use the unit cost defined for the UM in the related Additional Units of Measure table. For Inventory and Purchase lines where Break Points By is Unit Cost, this will be the Std Unit Cost from IN Location Materials or HQ Materials, respectively.
    • Average Cost - For Inventory and Purchase lines where Break Points By is Total Cost, this will be the Avg Unit Cost from IN Location Materials (Inventory lines) or HQ Materials (Purchase lines) times the material quantity. If the line's UM does not match the material's standard UM, the system will use the unit cost defined for the UM in the related Additional Units of Measure table. For Inventory and Purchase lines where Break Points By is Unit Cost, this will be the Avg Unit Cost IN Location Materials or HQ Materials, respectively.
    • Last Cost - For Inventory and Purchase lines where Break Points By is Total Cost, this will be the Last Unit Cost from IN Location Materials (Inventory lines) or HQ Materials (Purchase lines) times the material quantity. If the line's UM does not match the material's standard UM, the system will use the unit cost defined for the UM in the related Additional Units of Measure table. For Inventory and Purchase lines where Break Points By is Unit Cost, this will be the Last Unit Cost from IN Location Materials or HQ Materials, respectively.
    • Standard Price - For Inventory and Purchase lines where Break Points By is Total Cost, this will be the Std Unit Price from IN Location Materials (Inventory lines) or HQ Materials (Purchase lines) times the material quantity. If the line's UM does not match the material's standard UM, the system will use the unit cost defined for the UM in the related Additional Units of Measure table. For Inventory and Purchase lines where Break Points By is Unit Cost, this will be the Std Unit Price from IN Location Materials or HQ Materials, respectively.

    The system then compares the calculated total cost (if using Total Cost Break Point By option) or the specified unit cost/unit price (if using Unit Cost Break Point By option) to the rate break points defined for the material (in SM Override Category Material). If the total cost or unit cost/unit price falls within any of the rate break point ranges, the system applies the specified markup or discount rate to determine the Total Billable. It will then divide the Total Billable by the line's quantity to determine the Billable Rate.

  2. If the total cost or unit cost/unit price does not fall within any of the rate break point ranges or no rate break points have been defined for the material, the system will then apply the override rate specified for the material in SM Override Category Material ( Percent field).
  3. If an override record is not found for the material, the system will then look for an override for the material's category. If a category override record exists, the system follows the same process indicated above to determine the total billable and billable rate.
  4. If no category override record is found, the system will then use the rate Basis defined in SM Rate Override Base (and displayed above the Rate Break Points grid in SM Rate Override Material) to determine which cost to use in determining the billable rate (as described in Step 1 above).

    The system then compares the calculated total cost or unit cost/unit price to the rate break points defined in SM Rate Override Material. If the total cost or unit cost/unit price falls within any of the rate break point ranges, the system applies the specified markup or discount rate to determine the Total Billable. It will then divide the Total Billable by the line's quantity to determine the Billable Rate.

  5. If the total cost does not fall within any of the rate break point ranges or no rate break points have been defined, the system will then apply the override rate specified in SM Override Base ( Percent field).
  6. If no rate is defined in SM Rate Override Base (i.e. the rate type is N-No Override) and this is a customer work order, the system will then look for overrides at the Customer level (see Step 7). If this is a Job work order, the system will then look for overrides at the scope rate template level (see Step 8).
  7. Customer Overrides (Customer WOs only) - The system looks for override rates using the same hierarchy defined above (Steps 1-5)
  8. Effective Date Overrides - If override rates are not found at the Service Site level (job work orders) or Customer level (customer work orders), the system will then look for Effective Date overrides using the rate template specified for the work order scope. If Effective Date overrides exist, the system will compare the Date specified on the work completed line to the Effective Dates specified for the rate template. If the work completed date falls within any of the effective date ranges, the system will then use the appropriate effective date template to determine material rates, using the same hierarchy indicated in Steps 1-5 above. No further rate search is performed.
  9. Rate Template - If the work completed date does not fall within any of the effective date ranges or no effective dates are defined, the system will then use the rate template to determine the material rate (using the same process indicated above).
    Note: If at any level, the markup or discount rate is set to 0.00, the system assumes you do not want to discount/markup the material; therefore, no discount or markup rate will be applied and no further rate search will occur.

    If you define rate break points at the service site or customer level (in SM Rate Override Base), it is recommended that you do not set the override type to N-No Override. The system will ignore rate break points when this condition occurs and will go to the next level to locate a discount/markup rate.