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Understanding Billing and Revenue

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Understanding Billing Rates

As a project manager, you can use billing rates to capture revenue on your projects. Billing rates are amounts of revenue per work unit associated with job roles or users. Multiplying the rates with the hours spent on work generates revenue for your projects. 

You will need a Plan license with Edit access to Financial Data in order to manage billing rates.
For more information about Access Levels, see "Access Levels by License Type."

After establishing your billing rates, you can then track revenue by creating billing records to record what has and has not been billed.
For more information about creating billing records, see "Creating Billing Records."

You can create billing rates for users, job roles, or you can have a one-time billing rate for a project or task.

User Billing Rates

As a user administrator, when you create a user, you can associate them with a Billing Rate by specifying a value for the Billing Per Hour field in their profile.
For more information about creating users, see "Creating Users."
billing_rate_for_user.png

Job Role Billing Rates

As a system administrator, when you create a job role, you can associate it with a Billing Rate by specifying a value for the Bill/Hr. field.
For more information about creating job roles, see "Creating and Managing Job Roles."
billing_rate_for_role.png

Fixed Billing Rates for Projects or Tasks 

In addition to user and job role hourly rates, you can also have the following fixed billing rates:

  • Fixed Amount for Fixed Hourly Revenue Type
  • Fixed Amount for Fixed Revenue Revenue Type

For more information about how the fixed billing rates are used to calculate revenue, see "Understanding Revenue Types."

Overriding Billing Rates

You can override job role billing rates for:

You cannot override user billing rates or fixed rates. 

Tracking Revenue Amounts

Workfront can track revenue automatically when tasks and projects are created based on the Planned Hours or the Actual Hours of the tasks. The revenue associated with the Planned Hours of the tasks becomes the Planned Revenue. The revenue associated with the Actual Hours of the tasks becomes the Actual Revenue.

For example, if a task with User Hourly Revenue Type is planned to take 2 hours and the user assigned to it has an hourly rate of $30 an hour, then the Planned Revenue of the task is $60. When the task is completed, if the user logs just 1.5 hours as the actual time spent to finish the task, the Actual Revenue amount is $45. 

You can record revenue in the following ways:

  • By defining the Revenue Type of your tasks, and associating users or roles assigned to work items with billing rates. This calculates the revenue by the amount of Planned or Actual Hours on the work items. You can set a cap to the maximum amount charged for hourly rates, or not. 
    For more information about specifying the Revenue Type of a task, see "Editing Tasks."
  • By billing a flat Fixed Revenue rate for tasks or projects.
    If you have tasks with Fixed Revenue, the Fixed Revenue amount will be added as the Planned Revenue of a task or a project, and the Planned Revenue of a task will be available to be added to a Billing Record as Fixed Revenue. 
  • By setting a flat billing Fixed Revenue rate for a project, and then set hourly rates for the tasks within the project. Workfront adds the hourly rates for the tasks to the flat rate of the project.
    For example, a mechanic using Workfront could enter a cost for parts as fixed revenue for the project, then bill hourly for the time spent fixing a car. Fixed Revenue on projects or tasks is then realized on completion.

You can also mark your tasks as "Not Billable", in which case there is no Planned or Actual Revenue associated with them.

Understanding Revenue Types

By default, the Revenue Type of all new tasks are set according to the Task & Issue Preferences specified by your system administrator. 
For more information about defining the task and issue preferences for your Workfront instance, see "Task and Issue Preferences."

The Project Owner can modify the Revenue Type of tasks and the Fixed Revenue for projects.
For more information about specifying the Fixed Revenue of a project, see "Editing Projects."
For more information about specifying the Revenue Type of a task, see "Editing Tasks."

You can apply the following Revenue Types to your tasks or projects:

Revenue Type

Description

Fixed Revenue

This type can be used with projects and tasks.

For tasks, regardless of the task assignments, the revenue on the task is always calculated using the Fixed Amount specified on the task. 

The Fixed Revenue from children tasks rolls up to the Revenue of the parent task and then to the revenue of the Project.

The amount of fixed revenue on tasks can be included in a Billing Record on the project.

User Hourly

This type can be used for tasks only.

The billing rate that you set for a specific user multiplied by the number of the Planned Hours for that task becomes the Planned Revenue amount of the task. The billing rate that you set for a specific user multiplied by the number of hours that user logs against the task is the Actual Revenue amount of the task.
For example, when you create a user and you set $20 for their Billing Per Hour field, then if the user submits 5 hours for a task on the time sheet, then the Actual Billing amount of the task is $100.

Role Hourly

This type can be used for tasks only.

This type is similar to User Hourly but uses job role rates rather than user rates.

User Hourly with Cap

This type can be used for tasks only.

Tasks are billed hourly as in User Hourly, but they have a maximum Cap Amount that you can specify.
For example, if the billing rate of a user is $25, but the Cap Amount on the task is $20, and the user logs one hour, the Actual Revenue on the task is $20. 

Role Hourly with Cap

This type can be used for tasks only.

This type is similar to User Hourly with Cap but uses job role rates rather than user rates. 

User Hourly Plus Fixed

This type can be used for tasks only.

Tasks are billed hourly as in User Hourly, but have a Fixed Amount that you can add to the user rate. The Fixed Amount specified on the task can be included in billing records for the project. The Fixed Amount does not get multiplied by the hours on the task. Only the user billing rate does. 

Role Hourly Plus Fixed

This type can be used for tasks only.

Tasks are billed hourly as in Role Hourly, but have an additional Fixed Amount that you can add to the role rate. The Fixed Amount specified on the task can be included in billing records for the project. The Fixed Amount does not get multiplied by the hours on the task. Only the job role billing rate does. 

Fixed Hourly

This type can be used for tasks only.

The Cap or Fixed Amount that you set for the task multiplied by the amount of hours entered against the task (regardless of user or their job roles) is the billing amount.

Not Billable

This type can be used for tasks only.

This Revenue Type has no effect on revenue.

If a parent object has this setting, child tasks with a billing type will still apply normally.

Understanding Revenue for Parent Tasks

If you change a standalone with billing information on it into a parent, the new parent tasks still retains any billing information previously applied to it, along with the hours previously applied. Any billing information coming from hours logged to the children tasks will roll up as Actual Revenue to the new parent task.

The Planned Revenue from the children tasks also rolls up to the parent task. 

Understanding Revenue for Issues

Issues do not have Planned or Actual Revenue or Cost amounts. 

If you log hours for an issue and you use an hour type which is marked as "Count As Revenue", then Workfront calculates an Actual Cost and an Actual Revenue amount according to the rate of the user who is logging in the time. This number is added to the Actual Cost and the Actual Revenue of the project. The hours can also be included in a billing record. 
For more information about tracking costs, see "Tracking Costs."
For more information about hour types, see "Hour Types."

Understanding Revenue Calculations for Tasks Based on User and Role Assignments

When calculating revenue for a task, consider the following:

  • If a user or a job role shows a rate of $0.00, Workfront reads that as a valid amount and it will multiply this amount by the amount of hours on the task to calculate the revenue. If you want to show no revenue for your tasks, ensure that the field for the billing rate for your user or job role is empty.
  • When job role billing rates apply, Workfront uses the override rate at the project level, instead of the billing rate for that role defined at the system level every time there is an override rate on the project. 
  • In case of multiple assignees on the tasks, the scenarios outlined below apply for each assignee. 

There is a hierarchy of which rate is used in revenue calculations based on task assignments. 

The following scenarios exist when calculating task revenue based on the Revenue Type and the nature of the task assignment: 

 

Revenue Type = User Hourly

Revenue Type = Role Hourly

 

No Assignment

User
Assignment

Job Role Assignment

No Assignment

User Assignment

Job Role Assignment

Billing per hour rate for Planned Revenue

$0.00

If a user has a billing rate in their profile, then that rate is used to calculate Planned Revenue. Otherwise, the system billing rate of their primary job role is used.
NOTE The user can be assigned to the task with one of their secondary job roles, but the rate of the primary job role is used here instead.

The system billing rate of the job role assigned to the task is used to calculate Planned Revenue. 

$0.00

Workfront looks at the job role that the user fulfills on the task to calculate the Planned Revenue.
If the user is not associated with any role on the task, the Revenue is $0.00.

The billing rate of the job role assigned to the task is used to calculate Planed Revenue.

 

 

Billing per hour rate for Actual Revenue

If the user logging the hours has a billing rate in their profile, that rate is used.
Otherwise, the billing rate of their primary job role is used. If there is no billing rate associated with the user or their primary role, the Actual Revenue is $0.00.  
NOTE Only the rates associated with the user logging the time are taken into account for the calculation, even when another user is assigned to the task.

 
If the user logging the hours has a billing rate in their profile, that rate is used. Otherwise, the billing rate of their primary job role is used. 
NOTE If the user logging time has no billing rate associated with them, and they do not have a job role or a billing rate for their job role, then the rate from the job role associated with the task is used. If there is no billing rate for this role, the revenue is $0.00

Workfront uses the billing rate of the primary job role of the user logging the time. 
If the user logging the time has no job role associated with them, or if the primary job role has no billing rate, the Actual Revenue is $0.00.

If the user logging the time is assigned to the task, the billing rate of the job role associated with the user on the task is used to calculate the Actual Revenue. Otherwise, the billing rate of their primary job role is used. If the user has no primary job role or if their primary job role has no billing rate, the Actual Revenue is $0.00.  

If one of the job roles of the user logging the time is assigned to the task, that job role rate is used. If the job role assigned to the task is not associated with the user logging the time, then the billing rate of the primary role of the user is used to calculate the Actual Revenue. If the user does not have a job role or there is no rate associated with their primary job role, then the rate of the job role assigned to the task is used. 

 

*** Linked to other articles, do not change/ rename 

[This article is linked from "Tracking Project Progress with a Utilization Report"]