16 Overview to System Setup

This chapter contains the topic:

16.1 About System Setup

Before you can use the Contract Billing system, you must define the constants and rules you want the system to use during the billing processes. The information you define in the system constants and rules determines:

  • How the system uses dates (such as service and tax dates, G/L dates, and effective dates) in combination with the markup, account derivation, and tax derivation rules to process source transactions

  • Whether the system creates revenue recognition journal entries for non-T&M pricing types

  • How the system uses account derivation rules to create journal entries

  • How the system processes payroll transactions

16.1.1 Setup Features

Feature Description
System constants Control the global processing of:

  • Billable costs

  • Customer information

  • Dates

  • Invoices

  • Revenue

  • Journals

  • Default markup
Markup rules Define the calculation for the amount that you add to costs to account for overhead and profit.
Component rules Define an additional markup that is based on amounts and units. The markup and account derivation rules use this information.
Account derivation rules Define the accounting rules that the system uses to process journal transactions for billing, revenue recognition and reallocations.
Condition codes Define the conditions under which the system uses specific account derivation rules to create journal entries
G/L offset and retainage rules Define the following:

  • G/L offsets identify the accounts for which the system creates the offsetting entries during the posting of A/R information.

  • Retainage identifies the percentage of payment for the invoice which your company is paid after the work is complete.

  • Override payment terms.

  • Override currency mode.
Tax derivation rules Define the following:

  • The source transactions that are subject to tax

  • The tax rate or geographic area with common tax rates
Automatic accounting instructions (AAIs) Define accounting information and general ledger relationships.
User defined codes Define custom codes for the system, such as condition codes and adjustment reasons.