Understanding Unit Price Billing Lines
Contract billing lines for unit price define a billing term that is based on a quantity and price per unit. When you set up a billing line on a contract for unit price, your company agrees to bill the customer for a quantity in place at a predetermined price per unit.
When you define a contract billing line for unit price, the system supplies the:
Tax explanation, tax or geographical area, job, and accounts receivable company based on the contract master.
Accounts receivable offset based on the owner address information.
Revenue account based on the AAI BC02 for unit price.
You can define unit price billing lines for which you must calculate the billing amount manually at the time you generate invoices, or unit price billing lines that the system can use to calculate the billing amount automatically.
When you define a unit price for manual calculation, the system might display the following message:
Warning - Cross-Reference Not Setup
You can ignore this message because you do not use the cross-reference information when you use a unit price billing line for manual calculation.
To automatically calculate the billing amount for a unit price billing line, you must set up a cross-reference from the billing line to the account that contains the quantities in place. The system uses the account to determine the actual quantity in place to date from the AU (actual units) ledger.
When you set up a cross-reference for a unit price billing line, remember that:
The system uses only the account on the first line of the cross-reference table to calculate the billing.
You cannot use positional wildcards when you enter the account.
However, you can enter an asterisk (*) in the Subledger field to calculate unit price for all subledgers that are attached to the specified business unit, object, and subsidiary.
Payroll and equipment information is not applicable.
The system calculates the billing amount based on this formula sequence:
Earned Units-to-Date = Actual Quantity-in-Place-to-Date
Current Units = Earned Units-to-Date − Previously Billed Units
Unit Price = Schedule of Values ÷ Scheduled Units
Current Billing Amount = Current Units × Unit Price
Note: Earned units-to-date is calculated as inception-to-date, but if an annual close has not been completed, the Account Balances table (F0902) contains only year-to-date information.