OBJECTIVE: This document explains the purpose of ‘Billing/ Pricing contracts’ and charges in RedSky and financial controls related to all aspects of the move process like contracts, accounting, receivable and payable items, etc.
A contract defines a set of pricing elements that are available for a particular move/relocation. A contract can be defined for a general move type, e.g. International Exports, Relocation, Permanent Storage, Logistics, etc. Typically a contract will have a strong correlation with the job type. The contract consists of different charge elements (charge codes) which define various activities to be costed under the job, e.g. packing, crating, trucking, Customs, DTD Revenue, etc.
A contract can have either open rates i.e. the user will enter the rate or can have a fixed or rate matrix associated with the charge code. Optionally a client can tie the contract to a Corporate Account 'bill to codes' so the contract will only be applicable when billing to that 'bill to codes'. This way corporate rates filed with the account can be used for pricing or for billing.
The same contract is used for Pricing/Quotation and also for actual Billing and Approving Vendor Invoices.
Go to the ’Administration’ main menu and choose the sub-menu ‘Contract‘ to manage different Accounting Contracts under which Service Orders are set up. As shown in the screens below, this sub-menu will bring a list of all contracts:
Clicking on a contract name from the list will bring the Contract details page, as shown below. To view the charge list associated with a contract, click on the ‘Charge list’ tab, as highlighted below.
Charge code: Each contract can have multiple charge codes. If you are integrating RedSky with your financial system, you can tie the Accounting GL codes with the charge codes. Charge codes provide the details required to support quotations, billing, and payable functions. Use different charge codes to adequately cover all instances of quotes, billing, and vendor costs to be used under the contract selected. Thus we should have charge codes for shipping, packing, revenue, insurance, freight, agent work, THC, etc. For domestic or local job types we’ll have codes for hauling, packing, fuel surcharge, labor, truck, etc.
Clicking on the “Charge List” tab will bring the charge list associated with the contract, as shown below screen:
The list displays the code, description, Revenue and Payable GL codes, Rate Type, etc.
Ledger/ GL Code: The (general) ledger code is the code used in your chart of accounts for recording information in the receivables or payables ledger.
Rate Type: Redsky provides different ways to provide pre-determined rates for the charge code.
Click on one of the charges among the list, to view the Charge Detail page.
The function of the charge is to support the following functionality:
Controls Integration with the Financial System (not used by all clients).
Support Pricing or quote computations (in the Quote Pricing Section), this is also called Estimate section in Accounting Details.
Support Client Invoicing
Support Vendor bill recording and approvals.
Calculate commission.
General Data and Control Data Section:
If you are integrating RedSky with your Financial System then you can assign a revenue/receivable GL code and/or expense/payable GL code to be recorded when the line associated with this charge code is transferred to the financial system. Use the drop-down to select from the client-supplied list the GL Codes.
The saved GL code will appear on the Account line when the charge code is being selected. As highlighted below the revenue GL code associated with the charge chosen appears under the ‘Receivable Details’ section of the account line. The same process happens when the ‘Payable Details’ section is updated and the payable GL code will appear:
Note: These GL codes on the account line are non-editable so that the pricing or billing person cannot change the respective General ledgers code while entering the pricing lines.
There are other control codes e.g. mode, origin country, destination country, etc. Which will show the charge codes by matching them with the fields from the service order.
Charge Calculation Section
This section allows you to use the “compute” function for pricing and billing amounts by using your standardized rates. This will assist the pricing person and the billing person to do their jobs efficiently enforcing a rate discipline.
The charge detail provides support for doing the following computation:
(Quantity) x (Rate) x [adjustment factor] = Amount
You can enter the quantity for entitlement, estimate, revision, and actual (most clients use the estimate and actual functions only)
You can enter a price for receivable/revenue and costs for payable.
The Quantity shall be described by the following options:
Ask User
Preset value
From Field
Secondary quantity unit can be put when you want to compute amounts which are based on weight/volume and distance, normally used for trucking jobs.
Similarly, the price (rate) can be described by the following options:
Ask user
Preset value
Pick up from the field
Rate Grid (enter buy and sell rate brackets)
Formula (can use multiple factors and apply minimums, maximums, etc.)
Quantity and Rate should be using same basis, e.g. cbm and $/cbm or lbs and $/cwt.
Basis available are cwt, cbm, cft, flat, each, etc.
The combination of quantity and price will be used in Pricing and Billing Functions to compute the amounts.
The Rate Grid provides support for pricing which varies by weight or volume, e.g. if your price is:
Build Formula? used normally in permanent storage calculations where we may need complex calculations, e.g. minimums to be applied or we need other factors like Billing months.
The Amount Adjustment Factors are multiplier or divider to be applied to the computations, e.g. divide by 100 for cwt Rates.
Wording
You can describe the default wording to be entered on the account-line description to be used for the Invoice line description. You can also use a formula here to show descriptions like “Origin charges for 5000 lbs at $200/cwt”. The 5000 will be picked up from the service order.
The Test Wording button will show how the Wording will look in the Invoice Description.