Setting Up Burdening

This chapter provides an overview of burdening, lists a prerequisite, and discusses how to:

Set up segment information.
Set up pool information.
Set up burdening rates.

Understanding Burdening

On some contracts, the contractor bills direct costs and indirect costs plus a markup. The indirect costs include burdening (fringe expenses, general and administrative, overhead, materials handling, and so on) and are applied as a percentage of directs costs. The direct cost is often referred to as raw cost, and the burdening cost is often referred to as loaded cost.

To set up burdening, you set up burdening constants, segment definitions, burden computation methods, burden base rules, pool definitions, cost pool groupings, and burden rates. Using this setup information, the system creates burdening transactions in the Billing Detail Workfile table (F4812) as component transactions. Burdening transactions are eligible for costing, invoicing, and revenue using the standard processes.

When you run Workfile Generation (R48120) or G/L Transaction Selection (P48124), the system:

Retrieves the segment source, burden effective date basis, and burden rate type for cost, alternate cost, invoice, and revenue from the billing constants.
Determines the pool grouping code based on the segment source from the billing constants, and uses the pool grouping code to determine the segment from the Pool Grouping Codes table (F48S84).

If the base record does not contain a pool grouping code from either the job or home business of the employee, burdening is not performed.
Using the segment retrieved from the Pool Grouping Codes table (F48S84), retrieves the burden categories and burden source from the Segment Definition table (F48S80).
Accesses the Burden Base Rules table (F48S82) to determine whether the burden category applies to the transaction.

If the burden category applies to the transaction, the system retrieves the burden computation method. If the burden category does not apply to the transaction, burdening transactions are not created.
Uses the burden source associated with the burden category from the segment to retrieve the pool ID from the Pool Grouping Codes table (F48S84).
Uses the Burden Computation Method table (F48S81) to determine the basis for burden category calculations.
Retrieves the burden rates from the Burden Rates table (F48S85) for each burden rate type that matches the effective date, burden category, and pool ID.
Calculates burdening transactions.
Creates the burdening transactions in the Billing Workfile table (F4812) by using the component link and the component code to store the burden category.

Prerequisite

Before you set up burdening or process burdening transactions, set up the burdening constants on the Service Billing Constants form.

See Setting Up Billing Constants.

Setting Up Segment Information

This section provides overviews of segments and burdening categories, burden computation methods, and burden base rules, lists prerequisites, and discusses how to:

Set up segment definitions.
Set up burden computation methods.
Set up burden base rules.

Understanding Segments and Burdening Categories

Segments are codes that represent reporting units within a company, and are used to define the types of costs incurred and allocated. You can calculate burdening differently for different segments. You set up each segment to define the burden categories, the source of the burdening rate, and the sequence in which the burden categories are calculated and processed.

For example, you might set up a segment with burden categories in this sequence:

Fringe
Overhead
Material handling
General and administrative

The system automatically creates a record for raw cost using burden category RC and sequence number .01 for each segment. However, this record does not appear on the Segment Definition Revisions form. You use this record when you set up burden computation methods. The system issues an error if you attempt to add RC as a burden category.

Note. You might set up the same burden categories for more than one segment. You can differentiate the burdening calculations for the segments in other ways.

The sequence of the burden categories is important because you can use only burden categories with a higher sequence number in the calculation of a burden category. For example, if you sequence burden categories as fringe, overhead, material handling, and then general and administrative, the calculation of fringe can be based only on raw cost. Overhead can use the raw cost and the fringe cost in the calculation. You use the Burden Computation Methods program (P48S81) to indicate which of the available values to use in the calculation.

Note. You cannot delete a segment or burden category that has dependent burdening records in the Burden Computation Method table (F48S81), the Burden Base Rules table (F48S82), the Pool Definition table (F48S83), the Pool Grouping Codes table (F48S84), or the Burden Rates table (F48S85). To delete a segment or burden category, first check the dependent burdening tables and delete records attached to the segment or burden category, and then delete the segment or burden category.

Understanding Burden Computation Methods

Burden computation methods are used to identify compounding rules for each burden category. Only burden categories with a lower sequence number can be used in the burden computation method for another burden category.

For example, using the same burden categories from the previous segment example, the computation methods for one segment might specify that:

Raw cost is included in the calculation of fringe.
Raw cost and fringe are included in the calculation of overhead.
Raw cost is included in the calculation of material handling.
Raw cost, fringe, overhead, and material handling are all included in the calculation of general and administrative costs.

For another segment with the same burden categories in the same sequence, the computation methods might specify that:

Raw cost is included in the calculation of fringe.
Raw cost is included in the calculation of overhead.
Raw cost is included in the calculation of material handling.
For labor-related accounts, raw cost, fringe, and overhead are included in the calculation of general and administrative costs.
For other direct cost accounts, except materials and subcontracts, raw cost is included in the calculation of general and administrative costs.
For material and subcontract accounts, material and handling only (not raw cost) is included in the calculation of general and administrative costs.

Note. You can set up different computation methods by account for the same burden category by setting up multiple computation methods for that burden category, and then specifying the computation method for each account range when you set up burden base rules.

Understanding Burden Base Rules

You set up burden base rules in the Burden Base Rules table (F48S82) to associate burden computation methods for each burden category with specific job numbers, contract numbers, or job types. You can also define a default rule. You can further define burden base rules by ranges of object and subsidiary accounts.

During the burdening process, the system searches the Burden Base Rules table (F48S82) to determine whether a particular burden category (for example, fringe, overhead, and so on) applies to a given transaction. If the burden category applies, the system retrieves the burden computation method to be used in calculating the burden amount from the Burden Base Rules table. The system searches the table beginning with the most specific information found on the transaction and proceeding through less specific information until a matching record is found. If no matching record is found, the burden category is not applicable. The search hierarchy is job number, contract number, job type, and finally the default record. The rules are further defined by specific ranges of object and subsidiary accounts.

Prerequisites

Before you complete the tasks in this section:

Set up segment IDs in UDC 48S/SI.
Set up burden categories in UDC 48S/BC.

Note. The codes for burden categories must be different from component codes in UDC 48/CM.

Forms Used to Set Up Segment Information

Form Name	FormID	Navigation	Usage
Work with Segments	W48S80A	Burdening Setup (G48S43), Segment Definitions	Add and maintain segments and related burden rules pertaining to the segment.
Segment Definition Revisions	W48S80B	Click Add to set up a new segment or select an existing segment, and click Select on the Work with Segments form.	Set up the burden categories, the source of the burdening rate, and the sequence in which the burden categories are calculated and processed for a segment.
Work With Burden Computation Methods	W48S81A	Select a burden category on the Segment Definition Revisions form, and select Computation Methods from the Row menu.	Review existing computation methods that have been set up for a specific burden category.
Burden Computation Method Revisions	W48S81B	Click Add to set up a new computation method, or select an existing computation method and click Select on the Work With Burden Computation Methods form.	Set up computation methods to identify compounding rules for each burden category.
Burden Base Rules	W48S82A	Select a burden category on the Segment Definition Revisions form, and select Base Rules from the Row menu.	Associate burden computation methods for each burden category with specific job numbers, contract numbers, or job types.

Setting Up Segment Definitions

Access the Segment Definition Revisions form.

Segment ID

Enter a code from UDC 48S/SI to identify the segment.

Burden Category

Enter a code from UDC 48S/BC to identify a type of burden (for example, fringe, overhead, and so on).

Burden Source

Enter a code to specify the source of the pool grouping code. The pool grouping code can be derived from category code 12 from either the home business of the employee or from the project.

The system uses the burden source associated with the burden category to retrieve the pool ID from the Pool Grouping Codes table (F48S84).

If you enter 1 for Employee, the system retrieves the pool grouping code for labor transactions from the Category Code - Business Unit 12 field (RP12) in the Billing Detail Workfile table (F4812). If you enter 2 for Project, the system retrieves the pool grouping code for the transaction from the Job Pool Grouping Code field (JPGC) in the Billing Detail Workfile table (F4812). Even if you select Employee, the system retrieves the pool grouping code for non-labor transactions from the Job Pool Grouping Code field.

Seq No (sequence number)

Enter a number to specify the sequence of the burden category in burdening calculations. If you leave this field blank, the system increments the sequence number from the previous line.

Note. The system supplies the sequence only when you are adding segment definitions, not when you revise segment definitions.

Setting Up Burden Computation Methods

Access the Burden Computation Method Revisions form.

Note. The system automatically displays the burden categories that have a lower sequence number than the selected burden category in the grid as available burden categories. You cannot add or remove available burden categories.

Computation Method

If you clicked Add on the Work With Burden Computation Methods form, enter a code to identify the burden computation method. The code that you enter must be unique for the segment.

If you clicked Select on the Work With Burden Computation Methods form, this field is disabled and cannot be changed.

Incl Y/N (include yes/no)

Enter Y to include the available burden category in the calculation of the selected burden category. Enter N to exclude the available burden category.

Setting Up Burden Base Rules

Access the Burden Base Rules form.

Business Unit

Enter a job number from the F0006 table to associate a burden computation method with a specific job. If you enter a job number, you cannot enter a contract number or job type on the same line.

Contract Number

Enter a contract number to associate a burden computation method with a specific contract. The system completes the Contract Type and Contract Company fields when you enter a contract number. The combination of contract number, contract type, and contract company must be defined in the Contract Master table (F5201). If you enter a contract number, you cannot enter a job number or job type on the same line.

Job Type

Enter a job type from UDC 00/MC to associate a burden computation method with a specific job type. If you enter a job type, you cannot enter a job number or contract number on the same line.

Obj From (object from) and Obj Thru (object thru)

Specify a range of object accounts with which to associate a burden computation method. Leave these fields blank to apply the base rule to all accounts.

Sub From (subsidiary from) and Sub Thru (subsidiary thru)

Specify a range of subsidiary accounts with which to associate a burden computation method. Leave these fields blank to apply the base rule to all subsidiaries.

Note. The account range specified for a base rule must not overlap with the account range entered for another record that has the same segment ID, effective date, burden category, business unit, contract number, or job type value unless the subsidiary account ranges are different.

Burden Comp Meth (burden computation method)

Specify the burden computation method to associate with the information that you have specified on the line. This field is required.

Note. To create a default base rule, leave the Business Unit, Contract Number, and Job Type fields blank.

Setting Up Pool Information

This section provides an overview of pool definitions and pool grouping codes, lists prerequisites, and discusses how to:

Add pool definitions.
Add pool grouping codes.

Understanding Pool Definitions

You use the Pool Definition program (P48S83) to define pool IDs and the effective dates and descriptions for the pool IDs. This program also associates each pool ID with a segment ID and a burden category (fringe, overhead, and so on).

During the burdening process, the pool definition, combined with the segment ID, date, and burden category, is used to determine the correct rate by which to calculate a burden amount. The Pool Definition table (F48S83) is not accessed during the calculation of burden amounts; it is a setup table that defines the pool IDs that you subsequently associate with specific cost pools and rates.

Note. You cannot delete a pool ID that has been used on a pool grouping table or on a burden rate table. To delete a pool ID, first remove the pool ID from the pool grouping table and the burden rate table, and then delete the pool ID.

Understanding Pool Grouping Codes

You must associate every job and employee for which you want to calculate burdening with a single pool grouping code, and you must associate every grouping code with a single segment ID. For each pool grouping code, the Pool Grouping Codes program (P48S84) enables you to associate a specific pool ID with each burden category (fringe, overhead, and so on) that is defined for the segment. Each burden category must have an associated pool ID.

Prerequisites

Before you complete the tasks in this section:

Set up pool grouping codes in UDC 00/12.
Assign pool grouping codes in category code 12 of the jobs and employee home business units for which you want to calculate burdening.

Forms Used to Set Up Pool Information

Form Name	FormID	Navigation	Usage
Work With Pool Definitions	W48S83A	Burdening Setup (G48S43), Pool Definitions	Locate and review existing pool definitions.
Add Pool Definitions	W48S83B	Click Add on the Work With Pool Definitions form.	Add records to the Pool Definition table (F48S83).
Revise Pool Definition	W48S83B	Select an existing pool definition record on the Work With Pool Definitions form and click Select..	Update existing records in the Pool Definition table (F48S83). The Segment ID, Effective Date, Burden Category, and Pool ID fields are protected and cannot be changed. If you need to change any of these key values, delete and then re-add the record. The only values that can be updated are Pool Description and Ending Date.
Work With Pool Grouping Codes	W48S84A	Burdening Setup (G48S43), Pool Grouping Codes	Locate and review existing pool grouping codes.
Add Pool Grouping Code	W48S84B	Click Add on the Work With Pool Grouping Codes form.	Add records to the Pool Grouping Codes table (F48S84).
Revise Pool Grouping Code	W48S84C	Select an existing pool grouping code on the Work With Pool Grouping Codes form and click Select.	Update records that already exist in the Pool Grouping Codes table (F48S84).

Adding Pool Definitions

Access the Add Pool Definitions form.

Effective Date

Enter the effective date for the pool ID.

Note. The effective date for the Pool ID does not need to exactly match the effective date for the segment. The combination of segment ID and burden category must exist in the Segment Definition table (F48S80) with an effective date less than or equal to the date entered on this form.

Pool ID

Enter a code to identify the pool ID.

The combination of values for segment ID, burden category, effective date, and pool ID must be unique because these values make up the unique key for the Pool Definition table (F48S83). However, the same pool ID can be associated with different burden categories or with other segments.

Ending Date

Enter an ending date that is greater than the effective date. This field is optional. Under most circumstances, the ending date is automatically maintained by the system. As each new pool definition is added on this form, any previous definition using the same segment ID, burden category, and pool ID is automatically updated with an ending date that is one day before the effective date of the record being added.

Adding Pool Grouping Codes

Access the Add Pool Grouping Code form.

After you complete the Pool Grouping Code, Effective Date, and Segment ID fields in the header portion of the form and move the cursor into the grid, the system loads the grid with the appropriate burden categories as defined in the Segment Definitions program (P48S80) for the effective date. You cannot add or delete grid lines.

Pool Grouping Code

Enter a code that associates a job or employee with a set of cost pools.

Note. A pool grouping code can be associated with only one segment ID on any given date. However, you can move a pool grouping code to another segment ID as long as you enter a new effective date.

Pool ID

Enter a code to identify the pool ID for the burden category.

A valid pool ID is required for every burden category associated with the segment ID for the effective date.

Note. The pool ID that you enter in the grid must be set up in the Pool Definition program (P48S83) with the same segment ID and burden category combination and with an effective date less than or equal to the effective date entered in the header portion of the Add Pool Grouping Code form. The ending date found on the associated Pool Definition record must be greater than the effective date entered in the header portion of this form.

You can use the visual assist button on this field to access the Pool ID Search and Select form. This form displays only pool IDs that are valid on the currently selected grid line. Selecting a pool ID from this form ensures that the pool ID that you selected is valid.

Setting Up Burdening Rates

This section provides an overview of burdening rates and discusses how to add burdening rates.

Understanding Burdening Rates

Burdening rates are used to calculate burdening transactions and are stored in the Burden Rates table (F48S85). You define burdening rates by segment, effective date, burden category, burden rate type, and pool ID.

When you run the Workfile Generation program (R48120) or the G/L Transaction Selection program (P48124), the system retrieves burden rates from the Burden Rates table (F84S85) for each burden rate type that matches the effective date, burden category and pool ID of the base transactions in the Billing Detail Workfile table (F4812).

Forms Used to Set Up Burdening Rates

Form Name	FormID	Navigation	Usage
Work with Burden Rates	W48S85A	Burdening Setup (G48S43), Burden Rates	Locate and review existing burdening rates.
Burden Rate Entry	W48S85B	Click Add on the Work with Burden Rates form.	Add records to the Burden Rates table (F48S85).
Burden Rate Revisions	W48S85C	Select an existing burden rate on the Work with Burden Rates form and click Select.	Update existing records in the Burden Rates table (F48S85). The only value that you can update is the burden rate.

Adding Burdening Rates

Access the Burden Rate Entry form.

Burden Rate Type

Enter a code from UDC 48S/RT to identify the type of burden rate (for example, provisional or target).

Burden Category

Enter a code from UDC 48S/BC to identify a type of burden (for example, fringe, overhead, and so on).

Pool ID

Enter a code to identify the pool ID.

Rate

Enter the rate that the system should use to calculate burdening amounts. This field must be a percentage. Enter the percentage as a whole number. For example, for a rate of 25 percent, enter 25.

Rate Basis

The system enters a 1 (Gross amount basis) in this field to indicate that the rate is a percentage. The system calculates the burdening amount by multiplying the rate percentage by the cost, alternate cost, invoice, or revenue amount from the base transaction in the Billing Detail Workfile table (F4812).

Segment ID	Enter a code from UDC 48S/SI to identify the segment.
Burden Category	Enter a code from UDC 48S/BC to identify a type of burden (for example, fringe, overhead, and so on).
Burden Source	Enter a code to specify the source of the pool grouping code. The pool grouping code can be derived from category code 12 from either the home business of the employee or from the project. The system uses the burden source associated with the burden category to retrieve the pool ID from the Pool Grouping Codes table (F48S84). If you enter 1 for Employee, the system retrieves the pool grouping code for labor transactions from the Category Code - Business Unit 12 field (RP12) in the Billing Detail Workfile table (F4812). If you enter 2 for Project, the system retrieves the pool grouping code for the transaction from the Job Pool Grouping Code field (JPGC) in the Billing Detail Workfile table (F4812). Even if you select Employee, the system retrieves the pool grouping code for non-labor transactions from the Job Pool Grouping Code field.
Seq No (sequence number)	Enter a number to specify the sequence of the burden category in burdening calculations. If you leave this field blank, the system increments the sequence number from the previous line. Note. The system supplies the sequence only when you are adding segment definitions, not when you revise segment definitions.

Business Unit	Enter a job number from the F0006 table to associate a burden computation method with a specific job. If you enter a job number, you cannot enter a contract number or job type on the same line.
Contract Number	Enter a contract number to associate a burden computation method with a specific contract. The system completes the Contract Type and Contract Company fields when you enter a contract number. The combination of contract number, contract type, and contract company must be defined in the Contract Master table (F5201). If you enter a contract number, you cannot enter a job number or job type on the same line.
Job Type	Enter a job type from UDC 00/MC to associate a burden computation method with a specific job type. If you enter a job type, you cannot enter a job number or contract number on the same line.
Obj From (object from) and Obj Thru (object thru)	Specify a range of object accounts with which to associate a burden computation method. Leave these fields blank to apply the base rule to all accounts.
Sub From (subsidiary from) and Sub Thru (subsidiary thru)	Specify a range of subsidiary accounts with which to associate a burden computation method. Leave these fields blank to apply the base rule to all subsidiaries. Note. The account range specified for a base rule must not overlap with the account range entered for another record that has the same segment ID, effective date, burden category, business unit, contract number, or job type value unless the subsidiary account ranges are different.
Burden Comp Meth (burden computation method)	Specify the burden computation method to associate with the information that you have specified on the line. This field is required.

Burden Rate Type	Enter a code from UDC 48S/RT to identify the type of burden rate (for example, provisional or target).
Burden Category	Enter a code from UDC 48S/BC to identify a type of burden (for example, fringe, overhead, and so on).
Pool ID	Enter a code to identify the pool ID.
Rate	Enter the rate that the system should use to calculate burdening amounts. This field must be a percentage. Enter the percentage as a whole number. For example, for a rate of 25 percent, enter 25.
Rate Basis	The system enters a 1 (Gross amount basis) in this field to indicate that the rate is a percentage. The system calculates the burdening amount by multiplying the rate percentage by the cost, alternate cost, invoice, or revenue amount from the base transaction in the Billing Detail Workfile table (F4812).